Chhatrapati Shivaji International Airport

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In April 2006, Mumbai International Airport Pvt. Ltd. (MIAL) signed a 30 year concession contract with the Ministry of Civil Aviation, Government of India (GOI), to expand and upgrade the Chhatrapati Shivaji International Airport (CSIA) in Mumbai, India’s financial capital. The concession mandated MIAL to finance, design, build, operate and manage the airport for a period of 30 years with an option to extend it by another 30 years. After the expansion, CSIA was expected to cater to 40 million passengers per year and one million metric tones of cargo per year. Air travel in India was booming fuelled by strong economic growth, rapid expansion of low cost airlines and increasing international business links. The concession was aimed to overcome the enormous capacity constraints faced by CSIA - the busiest airport in India in 2006, and to upgrade the outdated facilities to enhance passenger comfort and ensure more efficient airport operations. The concession also reflects GOI’s commitment to encourage private sector participation to expand India’s airport infrastructure. MIAL was a public private joint venture company comprising of India’s GVK Group (37%), Airports Company South Africa (10%), South Africa’s Bidvest Group (27%) and Government of India’s Airports Authority of India (26%). The GVK consortium won the CSIA concession by offering to share 38.7% of the revenue with the government in an international competitive bidding (ICB) process conducted by the GOI. The other consortiums that participated in the ICB were: Reliance-ASA Mexico, GMR-Fraport, and DS Constructions- Munich Airport. MIAL designed a master plan to expand and upgrade the infrastructure at CSIA from a capacity of 18 million passengers and 400,000 tons of cargo annually in 2006 to 40 million passengers per year and one million metric tones of cargo per year. The development cost for the first five years will be Rs.2,600 crore he management of the existing Mumbai international airport (Chhattrapati Shivaji International Airport) was formally handed over the Mumbai International Airport Pvt Ltd. in August 2006. On 10 August 2006, the Supreme Court reserved its judgement on the Mumbai and Delhi airport modernisation and privatization case. The same will be delivered by the first week of September 2006. The government's SPV -- India Infrastructure Finance Company (IIFCL) was likely to fund 20 per cent of the total cost of the project. On 12 October 2006, Mumbai International Airports unveiled its master plan for the airport development. Finances have been arranged through domestic institutions led by IDBI and Unit Trust of India.On 7 November 2006, the Supreme Court dismissed the plea filed by Reliance Airport Developers (Anil Ambani Group) that challenged the finalization of the contracts for the project. On 24 April 2007, Mumbai International Airport (MIAL) achieved financial closure for modernising the Chhatrapati Shivaji International Airport (CSIA) in Mumbai. In 2013, MIAL underwent expansion of Domestic part of Terminal T2 and related infrastructure of Mumbai International Airport. The company raised additional debt due to cost escalation of existing project and inability to raise funds from other sources.It was planned the project would be funded through a mix of debt,equity,internal accruals,airport development fee,and deposits from real estate development. Monetization of real estate and realization of Airport Development Fees, a major source of funds had not materialized so far. This additional funding for the expansion project was closed on 31st August 2013. The additional funding was for US$ 468.9mn (INR 27478mn @ 58.6 INR/USD) However, out of the total debt raised, INR 8000mn was to repay an existing bridge loan. The balance US$ 332.4mn (INR 19478mn) was expected to be used for capital expenditure. The 12-year term loan had been arranged by IDBI and Axis Bank and had a quarterly repayment schedule.The other participating banks were Bank of India, Vijaya Bank, and Canara Bank.