Cabinet approves modernisation of Nagpur International Airport under PPP model

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the extension of the lease period of land owned by Airports Authority of India (AAI) and leased to MIHAN India Limited (MIL), paving the way for the upgradation and modernisation of Dr. Babasaheb Ambedkar International Airport through a Public Private Partnership (PPP) model.

The decision will enable MIL to grant a long-term licence for Nagpur Airport to GMR Nagpur International Airport Limited (GNIAL) for a period of 30 years from the Commercial Operation Date (COD).

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The move is being seen as a major milestone in the development of Nagpur Airport as a regional aviation hub under the Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) project.

Background of the Project

In 2009, MIL was formed as a joint venture between AAI and Maharashtra Airport Development Company Limited (MADC), with an equity structure of 49:51 respectively.

Although airport assets of AAI were transferred to MIL in 2009 for airport operations, execution of the lease deed was delayed due to land demarcation issues. Subsequently, AAI land was leased to MIL up to August 6, 2039.

In 2016, MIL floated a global tender to identify a private partner for operating the airport under the PPP model. GMR Airports Limited emerged as the highest bidder with an initially quoted revenue share of 5.76 percent, which was later revised to 14.49 percent of gross revenue.

However, MIL annulled the bidding process in March 2020, following which GMR Airports challenged the decision before the Bombay High Court. The matter later reached the Supreme Court, which ruled in favour of GMR Airports in September 2024.

Following the Supreme Court judgement dated September 27, 2024, MIL signed the concession agreement with GNIAL on October 8, 2024.

A New Era for Nagpur Airport

With the extension of the lease period of AAI land beyond August 6, 2039, the lease tenure will now become co-terminus with the 30-year concession period granted to GNIAL. This will facilitate the formal handover of the airport to GNIAL for development and operations.

The project is expected to bring significant investment, infrastructure modernisation and operational improvements at the airport through a combination of private sector efficiency and government oversight.

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GNIAL plans to transform Nagpur’s Dr. Babasaheb Ambedkar International Airport into a world-class aviation facility through phased development. The airport is envisaged to eventually handle up to 30 million passengers annually, strengthening its position as a major aviation hub in Central India.

The modernisation project is also expected to improve regional connectivity across Vidarbha and significantly enhance cargo handling capabilities, further boosting economic infrastructure in the region.

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