Civil Aviation ministry seeks Cabinet nod for GMR takeover of Nagpur airport’s operations

New Delhi: With MIHAN India Limited (MIL) and Airports Authority of India (AAI) signing the much-delayed land lease agreement for Nagpur airport, the Union Ministry of Civil Aviation has sought Cabinet nod to hand over the airport’s operations to GMR Airports Ltd as per a Supreme Court order.

The ministry has sought approval for directing the AAI to extend the land lease to MIL for another 30 years up to 2069, so that it could hand over the airport to the selected joint venture operator for running it for the concession period of 30 years without a break.

Following the apex court order of 27 September 2024, MIL signed the concession agreement with GMR Nagpur International Airport Ltd (GNIAL) on 8 October 2024. As per the pact, MIL must license the Nagpur airport land (including AAI’s land) to GNIAL for 30 years from the Commercial Operation Date.

As the 30-year license period for GNIAL, operations expected to start this year or next, will go beyond August 2039, AAI would have to extend the lease beyond 2039 in favour of MIL to enable the latter to license the airport land to GNIAL for 30 years.

MIL has been running the airport without formal land lease with AAI since August 2009 when it took over the airport. The lease deed could not be executed due to land ownership dispute between AAI and the Indian Air Force.

Last August, AAI signed the deed for leasing its land to MIL, the initial joint venture operator, for 30 years with effect from August 2009. So, whenever GMR takes it over as the second JV operator, it would have less than 14 years of operating rights whereas the concession agreement provides for 30 years of operating

rights. Officials said once the Cabinet approves the proposal, AAI will sign the lease deed for the extended period with MIL and subsequently, MIL will license the airport to second joint venture GNIAL.

The ministry is therefore also seeking ex-post facto approval for the formation of GNIAL by GMR Airports which won the 30-year initial concession for upgradation, modernization, operation, and maintenance of Nagpur’s Dr Babasaheb Ambedkar International Airport.

GNIAL will share 14.49 percent of its gross revenue receipts with Mihan India, and a further extension of 30 years would be through international bidding where GNIAL will have a right to match the highest bid if its bid is within 5 per cent of the highest bid.

GNIAL is to upgrade, develop and operate the airport with advanced facilities including a well-equipped building of 3 lakh square feet costing around Rs 7,000 crore to enhance the passenger terminal capacity to four million passengers annually.

The ambitious project involves upgrading existing infrastructure, building a modern cargo terminal, and improving airside facilities with a new Air Traffic Control tower. A key objective is to position Nagpur as a cargo hub, significantly enhancing cargo handling and logistics in the Vidarbha region.