Cabinet clears PPP-led upgrade of Nagpur airport lease extension

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved the upgradation and modernisation of Nagpur International Airport through a long-term licence under the Public-Private Partnership (PPP) model.

The decision also includes the extension of the lease period of Airports Authority of India (AAI) land leased to MIHAN India (MIL) beyond 6 August 2039. This extension will allow MIL to licence Nagpur Airport to the concessionaire, GMR Nagpur International Airport (GNIAL), for a period of 30 years from the Commercial Operation Date (COD).

The move marks a key milestone in Nagpur Airport’s development as a regional aviation hub under the Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) project.

MIL was formed in 2009 as a joint venture company between AAI and Maharashtra Airport Development Company (MADC), with an equity structure of 49:51 respectively. Although airport assets of AAI were transferred to MIL in 2009 for operations, the lease deed was delayed due to land demarcation issues. Later, AAI land was leased to MIL up to 6 August 2039.

In 2016, MIL invited global bids to select a private partner to operate the airport under the PPP model. GMR Airports (GAL) emerged as the highest bidder with a quoted revenue share of 5.76%, which was later revised to 14.49% of gross revenue. However, the bidding process was annulled by MIL in March 2020. This decision was challenged by GAL in the Bombay High Court, and later the Supreme Court of India ruled in its favour. Following the Supreme Court judgement dated 27 September 2024, MIL signed a concession agreement with GMR Nagpur International Airport (GNIAL) on 8 October 2024.

With the extension of the AAI land lease beyond 6 August 2039, it will now align with the 30-year concession period of GNIAL, enabling the smooth transfer of operations to the concessionaire.

This development is expected to usher in a new phase of growth for Nagpur Airport, with private sector participation and government oversight leading to investment, modernisation, and improved passenger and cargo services.

GNIAL will undertake the transformation of Dr. Babasaheb Ambedkar International Airport into a world-class facility in phased development. The airport is planned to reach a capacity of handling up to 30 million passengers annually, strengthening connectivity in the Vidarbha region and boosting its economic infrastructure. Cargo handling capacity is also expected to increase significantly.