India: Adani, Fairfax, GMR bid for Jewar airport in Greater Noida

Adani Group’s ambitions in the energy sector have been hitting various roadblocks. Photo: Pradeep Gaur/Mint

Adani Enterprises Ltd (AEL), Fairfax India Holdings Corp., and GMR Infrastructure Ltd were among the four bidders who qualified for the 30,000-crore Jewar airport at Greater Noida, Uttar Pradesh.

The four companies met the technical and financial criteria set out by the state government to qualify for the bidding process for the Noida International Airport Ltd (NIAL) project, two people aware of the development said, requesting anonymity. The airport, which is expected to be completed by 2040, will be the largest airfield in India with 4-6 runways.

Mint could not confirm the identity of the fourth bidder. Around 20 companies, including government-run Airports Authority of India, Zurich airport operator Flughafen Zurich AG, and Anil Ambani-led ADAG group, had shown interest in the project.

Spokespersons for GMR, AEL and Fairfax did not respond to Mint’s queries seeking comment.

The bidding process for NIAL will be run by the Yamuna Expressway Industrial Development Authority, the state-run implementation agency for the greenfield project.

The winning bid will be decided on the basis of the highest monthly per-passenger fee that the concessionaire will offer to the state government.

Jewar is one of the 18 greenfield airports that have been given in-principle approval by the central government.

Some others are Mopa (Goa); Navi Mumbai, Pune, Shirdi, and Sindhudurg (Maharashtra); Bijapur, Gulbarga, Hassan, and Shimoga (Karnataka), Kannur (Kerala); and Bhogapuram airport (Andhra Pradesh).

The airport will be built in four phases. Phase 1, which will have one runway and an annual passenger capacity of 12 million, is expected to be operational by 2023 at a cost of 4,588 crore. NIAL is designed to handle 70 million passengers a year by the end of phase 4.

The techno-economic feasibility report for NIAL by PwC expects that the project will require equity capital of 8,868 crore from its sponsors, while the remaining will be raised through external debt. At least three of the four bidders have investments in the airports sector in India. GMR Infrastructure, one of the first private airport operators in India, operates the Delhi, Hyderabad, and Philippines airports. Indian-origin Canadian billionaire Prem Watsa is a majority shareholder in Bengaluru International Airport Ltd, while Gautam Adani-led Adani Enterprises Ltd successfully bid for the six public airports that were recently privatised by the government.

“Delhi-NCR definitely needs a second airport, even after the capacity expansion at the Indira Gandhi International Airport,” Vijay Agrawal, executive director, Equirus Capital, an infrastructure advisory firm, said in an interview.

“Jewar is situated at a prime location and will be accessible to passengers from Agra and Lucknow as well. The government has made a large land parcel available. We will have to see how much the bidders are willing to pay the government, taking into account the tariffs charged by the Airports Economic Regulatory Authority,” he said.

In October 2018, the Uttar Pradesh government had notified the acquisition of 1,239.14 hectares for the development of the Noida airport under Section 11 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The administration had to acquire 1,239.14 hectares from 3,000 farmers for the first phase, in Gautam Buddh Nagar. The government requires 5,000 hectares for the entire project.

Since 2018, investments and private participation in the airport sector has taken off in India.

Given the rapid airline passenger growth in the country, the capacity in multiple airports is being breached. With a majority of India’s population waiting to take to air-travel, growth opportunities are huge. A 2018 estimate by the research arm of credit rating agency Crisil found that the airports sector requires an investment of $45-50 billion by 2030.

The article was first reported on Livemint.com  

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.