The Rs 9,000 crore (Rs 90 billion) second airport project for Mumbai, promoted by the state government-owned corporation City & Industrial Development Corporation is one of the most lucrative projects financially with 17.5 per cent internal rate of return says the financial viability study of well-known financial institute IL&FS.
Speaking to Business Standard joint managing director of the Cidco Deepak Kapoor said, in the January meeting between Civil Aviation Minister Praful Patel and Chief Minister Vilasrao Deshmukh the project had got a push.
During the meeting it was decided to consider the high project cost to get project's financial viability study done, so IL&FS was asked to do the study on project's financial viability.
The study says, by 2030 Mumbai Metropolitan Region will generate an air traffic of 90 million passengers per annum and even after one uses Sahar and Santa Cruz airports to its optimum capacity these two airports can't handle the traffic beyond 40 million passengers, per year.
So there is a need for a second airport in MMR considering the 50 million passengers need to be catered to and when the second airport reaches its optimum capacity, the IRR will reach around 17.5 per cent.
The sensitivity analysis also shows that even if the present trend of rising cement and steel price continues or some unseen events escalate the cost of project abnormally or actual passengers traffic doesn't grow to the projected levels even then, the IRR for project will not fall below 13 per cent.
We have submitted the IL&FS study to civil aviation ministry and all concern departments of central government and civil aviation ministry has initiated the process to prepare the cabinet note on this project, said Kapoor.
He further said, we expect Union Cabinet will clear the project in month or two and after which it will take one and half to two years for us to appoint the consultants, float global tenders and select the partner etc. & hope to see first flight from this new air port taking off in 2013 or 2014.
It will be the greenfield project with private partner brining 74 per cent equity & Airport Authority of India and Cidco holding remaining 26 per cent, equally, he added.
Meanwhile speaking to reporters Sanjiv Ubale, secretary (special projects) said, "State government has submitted a final proposal for the second airport near Panvel to the Centre and it is expected Union Cabinet will clear this project within one month."
The project will spread over 2,058 hectares of land, the implementing agency for project Cidco has 1,150 hectares in its possession, nearly 450 hectares of land is owned by various other state government agencies a transfer process for which will be initiated very soon and the rest will be acquired after the Union Cabinet formally approves the project, said Ubale.
And issues like rehabilitation or displacement of farmers is not involved for the rest of the land, Ubale calimed.