Navi Mumbai airport project faces delay despite award of contract

Development of the state-of-art airport in Navi Mumbai will take more than the estimated time as the pre-development work for the greenfield airport will itself take more than a year as per CIDCO's own estimates.

City and Industrial Development Corporation of Mumbai (Cidco), which is tasked with infrastructrure development in Navi Mumbai informed the Bombay high court on Tuesday.

Cidco's counsel, advocate GS Hegde told the division bench of Chief Justice Manjula Chellur and Justice Girish Kulkarni that seven villages are required to be rehabilitated and one river is required to be diverted as part of the pre-development work.

Further, even if Cidco manages to complete pre-development work on the stretch earmarked for airport development, the Hyderabad-based GVK Group will face technical difficulties in setting up the new airport in a swamp land.

Besides, the group faces a daunting task in raising funds for the Rs16,000-crore project due to its weak financial metrics. 

The group's listed holding company, GVK Power & Infrastructure (GVK Power), has been classified as a non-performing asset (NPA) by a few lenders, as it failed to repay loans as of December 2016. Its consolidated debt stood at a staggering Rs26,636 crore as of March last year.

Cidco's counsel told the court that pre-development work has already started and a majority of villagers have consented to being relocated while many of them have already been shifted.

However, the project, which also involves diverting a river for construction of the airport, along with other pre-development works will take more than one year, Hegde said, adding that the bidding process for the main work of development of the second airport for the city will take at least six months to finalise.

The counsel was responding to queries in a public interest litigation filed by Ratnagiri resident Mangesh Chavan raising suspicion about the entire bidding process and urging the court to stay – which took place on 25 January.

According to Chavan, a 46-year-old progressive farmer, Cidco has divided the entire development of the greenfield airport in four parts and has thereby separated the pre-development work from the main work of development of the airport.

He alleged that as Cidco granted the contract for the pre-development work to associates of one of the four qualifying bidders, while the other three withdrew from the bidding process citing conflict of interest.

According to him, the three bidders claimed that the timeliness and quality of their work will be dependent on the timeliness and quality of work done by one of their competitors – the contractor appointed for doing the pre-development work and in the process public interest was at stake, the PIL pointed out.

Chavan had approached high court in the wake of newspaper reports suggesting serious irregularities in the bidding process.

The court, however, allowed the PIL to be withdrawn after noticing that Cidco has taken adequate precautions and decided to link the pre-development work with the main development work and thus remove the conflict of interest apprehended by some of the bidders.