Addendum
Favoured Adani conglomerate winning battle for Mumbai’s airports
September 1st 2020
With the new airport at Navi Mumbai at the heart of a recent corporate battle, more delays to construction are forecast. Read More »
Almost 12 years after the two main airports in the country were privatized during the rule of the former UPA government, a new aggressive player has entered the airport space in India: the Ahemdabad-headquartered energy to aerospace and shipping conglomerate, Adani Group.
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In 2019, it won the rights to operate six airports by aggressively outbidding rivals. But due to COVID-19, it has recently sought to delay the handover of at least three of them. It also lost Jewar airport near Delhi to the Zurich Airport led consortium.
Now Adani has set its eyes on the jewel in the country’s airport crown, the existing Mumbai International Airport Limited (MIAL), which earns a majority of airport revenue in the country, and the proposed Navi Mumbai International Airport (NMIA). The airport holds an additional interest for the group because of its proximity to its own areas of operation.
Since 2018 the majority equity holder in MIAL, GVK, has been fending off Adani’s attempts to buy into the airport after Bidvest, one of the existing partners, exited the project. This matter is before the courts.
More recently, a Central Bureau of Investigation (CBI) case has been filed against the promoters of GVK. It alleged funds have been siphoned off from the Mumbai airport project to the tune of over Rs 700 crore (US$70 million). Many allege this has been done at the behest of the Adani family, considered to be close to the Modi government. “The Adanis are working at various levels to try to evict GVK from the Mumbai picture,” said an official involved with the project.
The CBI case against GVK makes the group a “pariah” and may change the complexion of the transaction as many banks and stakeholders have become wary of dealing with an entity being investigated at such a high level.
Whatever the provocation, the latest buzz in the industry is GVK may sell its share of the Mumbai airport group to Adani.
A bigger worry for the country’s aviation industry is the latest developments and possible change in ownership may lead to another pause in the construction of the already much delayed Navi Mumbai International Airport.
Sprawling Mumbai is the capital of the state of Maharashtra. Its government had aimed for a first flight from NMIA by the northern hemisphere winter of 2019. Winter 2019 has come and gone and as of now, construction at the site has yet to begin. The COVID-19 outbreak has provided a reprieve for the city’s saturated airport, but it only will be temporary.
To call an airport “jinxed” is not a happy description, but there is virtually no other word that so aptly describes the fate of the NMIA project, which was proposed in 1997 and approved in 2007.
