Nagpur airport transfer mired in red tape

MUMBAI: The Maharashtra government has decided to take up the asset transfer issue of Nagpur airport with the civil aviation ministry at a meeting this week, Mantralaya sources told ET. Chief minister Vilasrao Deshmukh is keen on getting the Airport Authority of India (AAI) to hand over all the assets there to the Maharashtra Airport Development Corporation (MADC), which is developing India’s first multi-modal international hub airport in Nagpur (MIHAN).

Mr Deshmukh is the chairperson of MADC, which has formed a special purpose vehicle with the AAI to facilitate land transfer. The MADC has a 51% stake in the SPV and the AAI 49%. The bone of contention between the two is 937 acres of land. “The chief minister would take up the issue of Nagpur airport assets with civic aviation minister Praful Patel. As per the MoU signed between the government and the AAI in December 2006, all assets of the Nagpur airport were supposed to have been handed over to the MADC within six months. But the AAI has neither handed over the airport even after eight months, nor does it seem ready to do so in the near future,” said a senior official of the state government.

Congress MP from Nagpur, Vilas Muttemwar, will also attend the upcoming meeting. Congress sources here said the project had almost become a prestige issue as the aviation ministry is headed by the NCP. There are also allegations that the NCP has been engineering protest against the project in Nagpur to get it stalled.

The MADC is developing MIHAN on 4,300 hectares of land. An SEZ, which is part of the MIHAN project, is going to come up on 2,080 hectares. So far, the MADC has acquired around 2,200 hectares and the process to take possession of another 850 hectares is under way, MADC sources told ET. The AAI’s refusal to pass on the airport assets has put the entire project on the slow track, MADC sources said. “A slew of international as well as national clients want to invest in the SEZ. Both MIHAN and the SEZ are just the right kind of investment vehicles that could trigger a phenomenal economic growth of the entire Vidarbha region,” a senior MADC official said.

IT majors like Satyam Computers, HCL, L&T Infocity and realty player Shapoorji Pallonji have all zeroed in on the Nagpur SEZ. Plus, Boeing has announced an investment of $185 million in setting up a maintenance, repair, and overhaul (MRO) facility and an aeronautical training institute here. But a key prerequisite to MIHAN and the SEZ project is upgradation of the Nagpur airport. “The MADC plans to extend the runway from the existing 3,200 metres to 4,000 metres and upgrade infrastructure at the terminal so that it is able to cater to 1,500 passengers per day. But the project won’t take off unless we get the control of all airport assets,” said an MADC official.

Mantralaya sources said the AAI’s stand has defeated the very purpose of forming an SPV and signing of the MoU. The MoU was signed with the explicit understanding that the assets would be transferred within six months. Subsequently, an SPV was formed to facilitate the process. “Now, the AAI is holding up the proposal on the ground that the MADC must first acquire entire land earmarked for the SEZ. But the MoU does not even remotely mention any such condition,” a state official said. All these issues, sources said, would come up for discussion at the meeting.