project information memorandum 2016 · pdf filenagpur, the second capital city of maharashtra...

MIHAN India Limited

(A JVC between MADC and AAI)

Up-gradation, Modernization Operation and Maintenance of Dr.

Babasaheb Ambedkar International Airport, Nagpur through PPP on

DBFOT basis

PROJECT INFORMATION MEMORANDUM

2016

Contact Details

MUMBAI NAGPUR

Shri. Vishwas M. Patil, IAS, VC & MD,

MADC

Maharashtra Airport Development Co.

Ltd.

8th Floor, World Trade Centre, Cuffe

Parade,

Mumbai - 400 005, Maharashtra, India.

Tel. No. : +91-22-49212121, 49212122,

49212109

Fax No. : +91-22-22163814

Shri Abid Ruhi, General Manager (Engg. &

Projects)

MIHAN India Limited

1st Floor, Old Terminal Building, Dr.

Babasaheb. Ambedkar International Airport,

Nagpur – 440005

tele: +91 (0712) 6650100

fax: +91 (0712) 6650101

Glossary

AAI Airports Authority of India

AERA Airports Economic Regulatory Authority of India

BPO Business Process Outsourcing

GOI Government of India

ICAO International Civil Aviation Organization

ITES Information Technology Enabled Services

JVC Joint Venture Company

MADC Maharashtra Airport Development Company Limited

MIDC Maharashtra Industrial Development Corporation

MIL MIHAN India Limited

MOCA Ministry of Civil Aviation

mppa Million Passengers Per Annum

MRO Maintenance, Repair and Overhaul

PPP Public Private Partnership

SEZ Special Economic Zone

TEFS Techno-Economic Feasibility Study

CONTENTS

Project Background .....................................................................................................................1

Project Appreciation ....................................................................................................................1

Formation of MIHAN India (Private) Limited .............................................................................1

Brief on Nagpur ...........................................................................................................................3

Potential of the city ..................................................................................................................4

MIHAN SEZ ................................................................................................................................6

Envisaged Infrastructure Development at MIHAN ....................................................................6

Salient Features of Multi- Modal International Hub Airport at Nagpur .......................................7

Dr Babasaheb International Airport, Nagpur ..............................................................................10

Background ...........................................................................................................................10

Current traffic .........................................................................................................................13

Current revenues ...................................................................................................................14

Up gradation and Modernization of Dr Babasaheb International Airport – the Project ...............15

Background ...........................................................................................................................15

Master Plan ...........................................................................................................................15

Traffic projections ..................................................................................................................17

Tariff ......................................................................................................................................19

City Side Development ..........................................................................................................20

Project development – key terms ...........................................................................................20

Strength and Potential of the Project ......................................................................................21

Annexures .................................................................................................................................22

Project Information Memorandum

Up-gradation, Modernization Operation and Maintenance of Dr. Babasaheb AmbedkarInternational Airport, Nagpur through PPP on DBFOT basis

Page | 1

Project BackgroundDr. Babasaheb Ambedkar International Airport is an International airport at Nagpur. It is one of

the 18 airports in Maharashtra. The airport is now envisaged to be upgraded and modernized

into a state-of-the-art airport through Public Private Participation (PPP). Mihan India Limited

proposes to develop the airport to provide world-class facilities and infrastructure, in accordance

with International Civil Aviation Organization (ICAO) standards and practices. The airport also

aims to exploit the central location of Nagpur and convert the present airport into a major cargo

hub with integrated road and rail connectivity.

MIL has appointed Ernst & Young LLP (EY) as Transaction Advisors to provide assistance in in

financial feasibility and preparation and development of project through Public Private

Partnerships (PPP).

Project AppreciationNagpur, the second capital city of Maharashtra is in the central part of India, has a strategic

place among the international aviation routes. Though Dr. Babasaheb Ambedkar International

Airport has been operational at Nagpur for many years, it has never been an important airport,

possibly due to the economic activity of the region has not been highly developed to facilitate

the development of a major airport.

Nagpur’s unique location at the crossing of the air route between Europe and South-East Asia,

as well as between South Africa and North-East Asia makes it a logical and ideal location for

passenger and cargo hub. The fact that the trunk north-south and east-west highways and

railways also are crossing at Nagpur make it obvious to explore the multi-modal principle. This

principle will ensure trans-shipping of passengers and cargo between different modes of

transport - rail to road, road to rail, surface to air, etc. Their integration with International

Passenger and Cargo Airport facilities would make it very advantageous and cost effective for

development of air transportation. Apart from this Nagpur Airport has the distinct advantage of

being adjacent to a large multi - product SEZ like the case of Dubai and Singapore hub airports.

Given this background, the basic objective is to establish a Multi-modal International Hub Airport

at Nagpur by taking advantage of the already existing infrastructure. Even in aspects of regional

requirement, though Nagpur City and the hinterland of the Vidarbha Region have not developed

well so far, new government initiatives are on the anvil for further rapid development.

With this background Government of Maharashtra has taken the initiative through Maharashtra

Airport Development Company Limited (MADC), to develop a world-class Multi-modal

International Hub Airport at Nagpur (MIHAN) to cater to the needs of passengers and cargo. In

order to develop the airport, MADC has formed a 51%: 49% joint venture company (JVC)

MIHAN India Limited (MIL) with Airport Authority of India (AAI)

Formation of MIHAN India Limited

In order to achieve the envisaged development of the Dr Babasaheb Ambedkar International

Airport, the Airport Authority of India (AAI) and Maharashtra Airport Development Company Ltd



Page | 2

(MADC) entered into a Joint venture Agreement at Nagpur on February 22, 2009 to form a Joint

Venture Company (JVC) for the development of a “Multi Modal International Hub Airport at

Nagpur” in coordination with Government of India (GoI), MoCA, AAI and India Air Force /

Ministry of Defence.

MIHAN India Limited is the JVC formed for further development and operation as part of the

MIHAN project. The company has been established for maintenance, operation and

development of Dr. Babasaheb Ambedkar International Airport as envisaged under MIHAN.

The development of the Nagpur airport will be undertaken by the JVC after transfer of the

assets to the JVC comprising MADC having 51% equity and AAI having 49% equity.

Shareholding Pattern of MIL

Further, being located at the centre of India it will also serve the long-felt requirement of a good

hub airport in India for domestic traffic. Nagpur will thus regain its glory from the days when it

was the hub for Indian airmail traffic.

MIL proposes to upgrade and modernize the Dr. Babasaheb Ambedkar International Airport,

Nagpur through Public Private Participation (PPP). For this we understand that in order to

explore the potential for such a hub airport a consortium led by L&T-RAMBOLL Consulting

Engineers Limited, Chennai was appointed to prepare a Techno-Economic Feasibility Study

(TEFS) in January 2001. The Report was approved by the Government of Maharashtra and

subsequently, the Government of Maharashtra established Maharashtra Airports Development

Company (MADC) to pursue airports development in the state. In order to take up the

development of the airport at Nagpur, L&T-RAMBOLL Consulting Engineers Limited, Chennai

again submitted a quick updated report in September 2008.

MIHAN

India

Limited



Page | 3

Brief on NagpurNagpur is recognized as one of the fastest growing city of India. It has the potential to plan and

develop all modern infrastructures and facilities for the city. The city of Nagpur has a population

of close to 4.6 million people (Census 2011).

Nagpur District Population

Census Population %±

1981 25,88,811 -

1991 32,87,000 26.96%

2001 40,67,637 23.74%

2011 46,53,171 14.39%

Source: Census of India

As of the 2011 census, Nagpur District comprising

14 tehsils had a population of 46,53,171 and

Nagpur city had a population of 24,05,421 and the

urban agglomeration had a population of

25,23,911. The district had a sex ratio of 948 per

1000 male compared to 2001 census figure of 932.

Average literacy rate was 89.52% compared to

84.03 of 2001; male literacy was 93.76% and

female literacy was 85.07%. 52.5% of Nagpur's

population is in the 15–59 years age category.

10.35% of the population were under six years old.

Out of the total District population for 2011 census,

68.30 percent lives in urban regions of district. Sex

Ratio in urban region of Nagpur district is 951 as

per 2011 census whereas for rural area it is 942.

Location of Nagpur

Nagpur, the second capital city of Maharashtra is in the central part of India. Nagpur is a city in

the central part of India, in the state of Maharashtra. Nagpur is 837 kms. from Mumbai, 1094

Kms south of Delhi, 1092 kms north of Chennai and 1,140 kms west of Calcutta.

Aerial Distance of Nagpur from the major Indian Cities

S No CityDistance

(km)

1. Indore 375

2. Hyderabad 420

3. Pune 620

4. Lucknow 660

5. Mumbai 690



Page | 4

S No CityDistance

(km)

6. Ahmedabad 700

7. Delhi 850

8. Chennai 900

9. Bangaluru 920

10. Kolkata 970

11. Chandigarh 1,085

12. Guwahati 1,400

13. Thiruvananthapuram 1,400

Important Central & State Government offices and institutions are located in Nagpur. Industrial

development exists along the fringe areas like Kamptee, Hingna, Wadi, Khapri, Butibori and

Kalmeshwar. Due to its central location Nagpur has become cosmopolitan in nature with large

number of residents from neighboring states of Madhya Pradesh, Chhattisgarh and Andhra

Pradesh.

Nagpur is a preferred destination not only for the Information and Technology industry and other

manufacturing industry. There have been considerable improvements in the urban infrastructure

of the city in the past decade, which is reflected in the increasing attractiveness of the city for

investments. It has become an important commercial and institutional hub, which houses

regional offices of Companies and Institutions catering to several States. It has also become an

important investment destination for Indian and multinational Companies.

Nagpur generally has a dry tropical weather Nagpur has always enjoyed the status of capital

city of State of Maharashtra. Nagpur has enjoyed the status of being the administrative centre of

Central India during the ancient and medieval eras. It carries a legacy of cultural and economic

prosperity. Being an important administration center with advantageous geographical location,

Nagpur’s economic development has been constrained by the limited development of the

hinterland of central India. However, with technological developments and overall development

of the central hinterland, the scenario is set to change. Its proximity to tribal areas has also

ensured the preservation of its natural resources, i.e., minerals and forests. In the modern era,

though Nagpur has lost its politically prime position, natural aspects of geography, climate and

location continue to position it favorably for prospering as an economic hub.

Potential of the city

Nagpur measures well on various liveability indices in comparison with other Indian cities. It has

the lowest income inequality among various cities in the country. ‘India Today – R K Swamy

BBDO Guide to Urban Markets’, also ranked the city as the tenth wealthiest, highest consuming

and most aware Indian city in 2004. Nagpur’s vantage location coupled with growth triggers like

the construction of the east-west and north-south corridors, proposed investments in the



Page | 5

multimodal transport hub, development of the special economic zone, and revival of industries

in the Vidarbha region would stimulate economic growth.

In addition, Nagpur has all the ingredients for emerging as a high quality service centre. IT being

a knowledge-based industry, quality human resources are one of its key requirements. The

region around Nagpur has 27 engineering colleges with about 8,600 engineering students

passing out of these colleges every year. (After the Pune region, Nagpur has the highest

number of engineering colleges in the state of Maharashtra.) This would render Nagpur an

attractive location for the IT-ITES industry. Low labour cost and the availability of highly skilled

manpower would add to Nagpur’s attractiveness.

Information Technology Enabled Services (ITES) and Business Process Outsourcing (BPO)

units would also consider Nagpur as a business destination, as they prefer locations with low

cost of living. A Dataquest-IDC study of the top ten IT cites in India ranked Nagpur seventh,

based on parameters such as manpower availability, information, communication and

technology (ICT) infrastructure availability and usage, lifestyle and environment. Also, as per the

KPMG – NASSCOM survey, Nagpur is one of the top four tier II cities that have a huge potential

for information technology and IT enabled services.

Nagpur holds a strategic position in international aviation routes. Its unique location at the

crossing of the air route between Europe and South-East Asia as well as between South Africa

and North-East Asia makes it a logical and ideal location for a passenger and cargo hub. Within

India also, the fact that the trunk north-south and east-west highways and railways also cross at

Nagpur makes it a natural choice as a transport hub based on multimodal transport principles.



Page | 6

MIHAN SEZNagpur has emerged as a key industrial belt and is currently home to several Maharashtra

Industrial Development Corporation (MIDC) approved industrial estates and investment regions.

Detailed below are the growth drivers of Nagpur.

Nagpur has emerged as an industrial base with

three main industrial/ SEZ establishments of –

MIHAN SEZ and Multi Modal Airport Hub and a 5

Star Industrial Estate by MIDC in Butibori. Apart

from these two major industrial clusters, the city

and its surrounding regions as has more than

1,600 medium and large scale industrial units

varying from paper products, food processing to

pharmaceuticals, electronics, textile, cements,

ceramics, plastics, engineering etc. Some of the

key units in the region include Mahindra &

Mahindra, Bajaj Auto, Voltas, Electrolux, Candico,

Vicco, Nippon, Indorama Synthetic, KEC, Hyundai,

ACC, Dinshaws, Haldirams etc. Trading is a prominent activity by virtue of which, Nagpur is a

large trading centre for number of commodities.

The Butibori industrial area is the largest in all of Asia in terms of area. The estate's largest unit

is of Indo Rama Synthetics, which manufactures synthetic polyester yarn. Other units in Butibori

include the power transmission company KEC, Hyundai Unitech, ACC Nihon Castings Ltd.

Koradi Thermal Power Station and Khaparkheda Thermal Power Station are the two major

thermal power stations located near Nagpur and operated by MSPGCL.NTPC has a Super

Thermal Power Plant in Mauda around 40 km from Nagpur whose first plant is commissioned.

The Hingna industrial estate located on the western fringes of the city is made up of around 900

small and medium industrial units. The major ones among them are tractor manufacturing plant

of Mahindra and Mahindra, casting units of NECO Ltd. (the country's largest casting group),

units of International Combustion, Bajaj Auto group, Candico (the second largest confectionery

manufacturing plant in India. Ajanta tooth brushes, and Sanvijay Group (largest steel rolling

group of companies for long products in Central India). Nagpur is home to ice-cream

manufacturer Dinshaws, Indian dry food manufacturer Haldiram's, Indian Ready to Cook food

manufacturer Actchawa and Ayurvedic product company Vicco and Baidnath.

Envisaged Infrastructure Development at MIHAN

· MIHAN Project consists of two parts namely International airport to act as a cargo hub

and a Special Economic Zone with residential zone covering a total area of 40.25 sq. km

on the southern end of Nagpur.

· Spread over 4354 ha and developed by Maharashtra Airport Development Company

(MADC), it is envisaged to comprise an international airport, MRO facilities, SEZ with IT



Page | 7

Park, Health City, Manufacturing Units, Captive Power Plant, Rail and Road Terminal,

Warehouses and various supporting infrastructure facilities including international

school, rail & road terminals, warehouses, retail and utility services

· The project aims to utilize the central location of Nagpur and convert the present airport

into a major passenger and freight hub with integrated road and rail connectivity.

Table: Area Classification of MIHAN SEZ

Facility Area (Ha) Area (acres)

Airport 1,365 3,173

SEZ 2,086 5,111

Roads, Interchange & RoB, Water Supply, Sewage System,Entertainment, Utility and Land for IAF (exchange) 904 2,384

Total Project Area 4,355 10,760

Salient Features of Multi- Modal International Hub Airport at Nagpur

1. Airport

■ To be developed as an International Hub Airport for Passenger and Cargo to be

extended over an area of 1,365 Hectares

■ Runway – Existing runway to be extended from 3,200 meters to 3,600 meters,

provision to be made for an additional parallel runway 4,000 x 60 meters capable of

handling Airbus A380 and similar aircrafts.

■ Airport Terminal Building: a semi-circular terminal building of 3 Million Sq. Ft. is to be

developed in phases.

■ Projected Passenger Traffic of 21.62 Million and Cargo Traffic of .27 million tonnes

by 2046.

■ Type of connectivity – Multi-Model Airport, and Goods, Truck Terminal all in one

project.

■ Space for parking 50 Aircrafts in the terminal and 50 Aircrafts remote.

■ Provision for Aircraft Engineering and Maintenance facilities (MRO on about 64

Hectares).

■ An Exclusive Cargo Complex

■ Other Passenger amenities – Hotels, Restaurants, SPA, Duty - Free Shopping

Centers, Retiring rooms.



Page | 8

2. SEZ

► MIHAN SEZ is conceived to significantly lend to the commercial viability of the

proposed multi modal cargo and passenger hub.

► Commencement of development activity by various IT companies and national

developers is reported to have taken positions in the SEZ, is presaged to trigger

development activity in the vicinity of MIHAN cluster and the city as a whole.

► The processing zone (3,614 acres) and non - processing zone (1,497 acres) of the

SEZ have been configured as depicted in the table below:

Classification of Processing and Non Processing Zone

MIHAN SEZ: Processing and Non Processing Zone

Facility Area (Ha) Area (acres)

Processing Zone 1,475 3,614

Power Plant 60 147

Information Technology Parks 534 1,309

Health City 60 147

Manufacturing and Value Added Units 821 2,011

Non Processing Zone 611 1,497

Rail/ Road Terminal 200 490

International School 10 25

Residential, Open Spaces, Hotels 401 982

Total MIHAN SEZ area 2,086 5,111

While the Health City is reported to have a multi - speciality hospital, the manufacturing and

value added zone constituting around 46% of the SEZ area is reported to comprise Gems &

Jewellery Zone, garments and textiles zone, food processing, pharma and biotech zone,

financial and insurance services etc. Currently upcoming office space supply in and around

Nagpur is majorly concentrated in the SEZ zone of MIHAN. Of around 1300 acres available in IT

Park of MIHAN SEZ, around 935 acres have already been allotted to large scale IT companies

for their operations to commence in this region.

The figure below provides for a snapshot of the existing infrastructure and the proposed or work

in progress developments initiated by Maharashtra Airport Development Company Limited in

MIHAN SEZ area.



Page | 9

Some of other key developments envisaged outside the SEZ area are:

■ Rail terminal by CONCOR - 109 acres (construction started in 2014)

■ Future Group Warehouse - 20 acres (fully operational)

■ BPCL Petrol Pump -1 acre (operational)

■ D Y Patil International School - 25 acres (operational)

■ Amazon - TCI Warehouse - 9acres (construction completed)

■ Mahindra Lifespaces - 25 acres (construction in progress)

■ Moraj Finanz - 11.6 acres (construction in progress)

■ Moraj Infra - 1 acre (construction in progress)



Page | 10

Dr Babasaheb International Airport, Nagpur

Background

Existing airport location

Nagpur Airport is located at 210 05’ 30.7” N & 790 02’ 53.8” E at an elevation of 308.45 AMSL.

Connectivity

Nagpur Airport has direct connections to over 7 domestic destinations viz. Mumbai, Delhi,

Indore, Bengaluru, Kolkata, Pune, Raipur and international connection to Sharjah.

Whether Conditions

General facilities: Nagpur Airport is a H24 airport with 3,200m runway. It is code 4D airport with

fire category of 7 and 17 parking bays for Code C type of aircrafts. Grid map showing the

general layout of airport is attached herewith.

Proposed Development plan: By 2045-46 airport will be developed to cater 6.93 million

passenger per annum and 55,000 tonnes of cargo. Terminal building of 72,500 sq. m. is

planned to be developed along with other infrastructure like 16 Nos. parking stand and parallel

runway for Code F operations.

Airport License

Copy of airport licensed issued by DGCA is attached as Annexure A

Environment Clearance

Copy of the Environmental clearance issued by Ministry of Environment & Forests (IA-III

Section) as Annexure C

Grid map

Copy of the Grid Map is enclosed as Annexure D

Facility Details:

Dr Babasaheb Ambedkar International Airport has a two runway system in an ‘open V

configuration’ with a main runway of 3,200 metres and a 14-32 orientation and a secondary

runway of 1,938 metres and a 09-27 orientation.

The Air Traffic Services, Surveillance and Navigation Aids facilities available currently at the

airport are provided below:

Table 2.6: Current ATC Facilities at Nagpur Airport

Air Traffic Services

ACC (Area) Available

Approach Available

Aerodrome ControlAvailable



Page | 11

Air Traffic Services

Surface ( SMC ) Available

FIC Not Available

Briefing Available

Briefing Available

Meteorology Available

RNFC Payment AvailableSurveillance

ARSR + MSSR AvailableNavigation Aids

DVOR 112.7 Mhz Available

DME Available

NDBNot Available

Source: Airport Authority of India

The current airport has Taxiways and Aprons with the following measurements:

Area Details of Taxiways and Apron

Taxiways and Aprons (Area in Sq. Meters)

Taxiway A 1,794

Taxiway F 1,638

Taxiway C 1,800

Taxiway D 900

Link Taxiway intersection to Apron 4,600

Parallel Taxi – Track 14 to 32 48,000

Parallel Taxi – Track 9 & 27 5,589

Taxiway M 1,875

Old Apron 9,928

New Apron 43,160

IAF 1,953Source: E&Y

The New Airport Terminal (NTB) has a total area of 7,000 square metres. The new terminal

section is a steel and glass structure which, when opened in April 2008, introduced a range of

modern equipment such as central air-conditioning, baggage conveyor system in arrivals as well

as departure hall, CCTV and FIDS.

Terminal Area and No. of Counters

Terminal Area in Sq. Meters No. of Counters

Check In Immigration Customs Security

Domestic 7,000 13 9 6 3Source: Airport Authority of India



Page | 12

Details of other passenger facilities at the Terminal building at Dr Babasaheb Ambedkar

International Airport, Nagpur are set out below:

Other Passenger Facilities

Entry Gates

Domestic Two + One Emergency gateInternational Two + One Emergency gate

X-Ray Baggage Facility

Domestic 04

International 01Shopping Facility

Domestic (NTB) T.R. Stall, Raj international

Car Parking

New TerminalBuilding

600 Cars capacity

Passenger Facilities

Passenger Facilities ► Car Rental Services► Cafeteria► Water Coolers► Postal Services► STD / ISD / FAX / Local

Call► First Aid Room► Trolleys► Wheel chair


Nagpur Airport has 3200 m X 45 m CAT-1 runway with PCN of 89/F/B/W/T Runway 14-32 has

simple approach on 14 end and CAT-1 approach on 32 end. There are 2 aprons namely

Terminal Apron and Remote Apron, both capable of handling Code C type of aircrafts. Terminal

apron has 12 bays out of which 02 Nos. are in contact bays and 10 Nos. are Remote bays.

Remote apron has all remote bays. PCN of Terminal Apron is 105 F/A/W/T and that of Remote

Apron is 85 R/B/W/T. Existing terminal is a two level terminal building with approx. area of

17000 sq.m. on ground floor and 9000 sq.m. on first floor. Drawing showing the ground and first

floor of the terminal building are attached herewith. Designed peak hour handling capacity of

terminal building is 900 Pax. Various concessionaires are awarded areas in the airport for

airline operations, ground handling, snacks, advertisement etc. Average daily passengers at

Nagpur Airport are about 3,626. Graph showing Typical day profile and annual pax. movements

is attached herewith.



Page | 13

Current traffic

Currently, eight domestic airlines are operating

from Nagpur International Airport. These include Air

India, True Jet, Spice Jet, Indi Go Airlines, Jet Lite

and Go Air, Ventura Air Connect, India Post. Two

international airlines, namely Air Arabia and Qatar

Airways, are also operating from the airport.

Seat capacity

The graph below depicts the weekly1 seat capacity

at the airport

IndiGo is leading carrier at the airport accounting for ~59.9% of the seats deployed at the airportfollowed by Air India and Go Air.

Traffic at Dr. Babasaheb Ambedkar International Airport, Nagpur

2010 - 11 2011 -12 2012 – 13 2013 – 14 2014 – 15 2015 - 16

AircraftMovement

14,961 15,322 13,480 12,990 14,042 13,416

Passenger Traffic 12,36,732 14,15,739 12,62,921 12,63,837 14,01,147 15,95,241

Freight Traffic 9,491 4,976 5,206 5,524 6,063 6,391


Over the last 10 years, the traffic at the airport grew at a compounded annual growth rate

(CAGR) of 10.44%; historic passenger trend has been elucidated in the graph below.

1 Week ending 17 June 2016



Page | 14

Current revenues

MIL earned total income of INR 40.78 crore for the FY ending March 2016 as against INR 36.54

during 2015. The table below elucidates the break of Aero and Non Aero revenues for the last 6

years.

Revenue Statement of MIHAN India Limited

Particulars

2011

Audited

2012

Audited

2013

Audited

2014

Audited

2015

Audited

2016

Provisional

INR Crore

Aero Revenues 9.08 10.78 10.25 9.79 10.41 10.22

Passenger Service Fee 12.71 14.64 13.02 13.49 14.85 16.86

Total Aero 21.79 25.42 23.27 23.28 25.26 27.09

Non – aero Revenues 8.49 10.13 9.13 10.63 11.28 13.70

Total Revenues 30.28 35.55 32.40 33.91 36.54 40.78



Page | 15

Up gradation and Modernization of Dr Babasaheb

International Airport – the Project

Background

The Multi Modal International Hub Airport at Nagpur (MIHAN) is an ambitious project that

promises to put the region firmly on the fast track to economic development.

Dr Babasaheb Ambedkar International Airport, which was also known as Sonegaon Airport, is

the main domestic and international airport serving the city of Nagpur in the Maharashtra district

of India, currently the public airport is managed and operated by the Mihan India Limited.

As stated earlier, Dr Babasaheb Ambedkar International Airport has a strategic location at the

crossing of the air route between Europe and South-East Asia, as well as between South Africa

and North-East Asia on the International Aviation Route With more than 300 international flights

fly over the city every day; the Nagpur Air Traffic Control is one of the busiest in India.

In line with the provisions of the Joint Venture Agreement, MIL or the Authority proposes to

upgrade the instant airport on Design Build Finance Operate Transfer basis on Public Private

Partnership (PPP).

The authority has adopted a two stage bidding process for selection of the private developer to

undertake the up gradation and modernization of the airport. In the first stage the Authority

intends to select the qualified bidder (the Request for Qualification document has been

published by the Authority on its website on 14 May 2016). The Authority shall select the

qualified bidder who fulfills the technical, financial and O&M criteria set out in the document and

the Authority shall share with such qualified bidders the Request for Proposal, draft Concession

Agreement and other bidding documents.

The bidder shall be selected based on the highest annual percentage revenue share, or the

Premium quoted by the highest bidder.

Scope of work will broadly include construction and development of airport facilities in four

phases which will include second runway, new passenger terminal building, refurbishing existing

terminal building, ATC tower and other air-side and land-side infrastructure for the Project and

the management, operation and maintenance thereof

Master Plan

The overall development has been proposed in four (4) phases; phase wise break up has been

elucidated in the table below:

Phase I

Components – Phase I Crores

1 Runway 164

2 Taxiway 77

3 Terminal Building 432

4 Cargo Building 19



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Components – Phase I Crores

5 Ancillary Buildings (Control tower, HVAC etc.) 22

7 Fire Station 21

8 Power House 16

9 Apron Area 25

10 Car Parking 3

11 Elevated/approach/perimeter road 107

12 Compound/operational wall 23

13 Underground sump 1

14 Storm water drains 15

15 GSE, Fire Station, Truck Door Pavement Area 10

16 Road over bridges 6 - lane as crossing 109

Base cost 1,044

17 Other expenses 372

Project cost (rounded off) 1,4202#

Phase II, III & IV

Particulars Phase II Phase III Phase IV

Runway 0 34 0

Taxiway 0 138 0

Terminal Building 172 0 96

Cargo Building 4 14 0

Ancillary Buildings (Control tower, HVAC etc.) 0 0 0

Fire Station 0 9 0

Power House 0 0 0

Apron Area 7 4 7

Car Parking 2 1 1

Elevated/approach/perimeter road 0 0 0

Compound/operational wall 0 0 0

Underground sump 0 0 0

Storm water drains 0 1 0

GSE, Fire Station, Truck Door Pavement Area 0 6 0

Road over bridges 6 - lane as crossingTotal 186 207 104

Pre project expenses @ 10% 19 21 10

Contingency @ 3% 6 7 3

Base Project Cost 2103#

2343#

1183#

2 The cost includes contingency, pre-operative expenses, escalation and finance charges(interest during construction, and other financing charges)3 The cost includes contingency, pre-operative expenses# The base cost is as per 2015 prices



Page | 17

Phase I development to be undertaken by the Concessionaire shall form part of the mandatory

works under the scope of work. Phase II, III and IV shall be undertaken based on traffic trigger

details of which shall be shared with the qualified bidders only during the Request for Proposal

stage.

Copy of the master plan has been provided at Annexure B.

Traffic projections

The Authority had engaged India Aviation Consulting & Support LLP (ICAS) who had carried out

the traffic study along with Airports Authority of India (AAI) till 2048.

Snapshot of the traffic study has been elucidated in the following section.

The air traffic trend at Nagpur Airport 2008-09 vis-à-vis 2012-13 (span of 5 years):

Air Traffic trend - Nagpur Airport 2008-09 and 2012-13

Traffic categoryfor the year

2012-13 2008-09 % change

A/c Movements ( in numbers)

International 520 1,556 -20%

Domestic 12,960 10,989 3%

Total 13,480 12,545 1%

Passengers ( in numbers)International 43,876 93,556 -14%

Domestic 12,19,045 7,04,883 12%

Total 12,62,921 7,98,439 10%

Freight (in MT)International 406 217 13%

Domestic 4,800 3,678 5%

Total 5,206 3,895 6%Source: IACS

The above table reveals that total aircraft and passenger movements have increased by 1% and

10% respectively and freight movement has increased by 6% during 2012-13 as compared to

the traffic handled during 2008-09.

The projected traffic for next 30 years for Nagpur Airport, considering the normal Indian air

traffic growth scenarios, has already been provided to the consultants. This however, did not

include the additional traffic that is likely to be generated due to the establishment of the SEZ as

this project is just getting implemented. The consultants thus have incorporated the additional

traffic that is likely to be generated by the SEZ and the all encompassed projected traffic.

Year Passenger (Lakhs)



Page | 18

International Domestic Combined

2012-13 0.44 12.19 12.63

2013-14 0.46 13.04 13.502014-15 0.62 14.09 14.71

2015-16 0.68 15.11 15.80

2016-17 0.91 16.36 17.26

2017-18 0.95 17.50 18.45

2018-19 1.03 18.59 19.622019-20 1.08 19.70 20.78

2020-21 1.14 20.88 22.02

2021-22 1.19 22.14 23.33

2022-23 1.25 23.46 24.72

2023-24 1.32 24.64 25.95

2024-25 1.38 25.87 27.25

2025-26 1.45 27.16 28.61

2026-27 1.52 28.52 30.04

2027-28 1.60 29.95 31.55

2028-29 1.66 31.44 33.11

2029-30 1.73 33.02 34.75

2030-31 1.80 34.67 36.47

2031-32 1.87 36.40 38.27

2032-33 1.95 38.22 40.17

2033-34 2.02 39.75 41.77

2034-35 2.10 41.34 43.44

2035-36 2.19 42.99 45.18

2036-37 2.28 44.71 46.99

2037-38 2.37 46.50 48.872038-39 2.46 48.36 50.82

2039-40 2.56 50.30 52.86

2040-41 2.66 52.31 54.97

2041-42 2.77 54.40 57.17

2042-43 2.88 56.58 59.45

2043-44 2.97 58.27 61.24

2044-45 3.06 60.02 63.08

2045-46 3.15 61.82 64.97

2046-47 3.24 63.68 66.922047-48 3.34 65.59 68.92

Source: IACS



Page | 19

The growth rates assumed for the passenger/traffic projection is based on information provided

by AAI. As per the above table it is estimated that by 2048 the passenger traffic at the airport

shall be 6.9 million, below are the details:

Forecasting - Domestic air traffic

Growth DriversShort term Medium Term Long Term

2011-18 2019-23 2024-28 2029-33 2034-38 2039-43

Traffic Growth Rates 7% 6% 5% 5% 4% 4%

Forecasting - International air traffic

Growth DriversShort term Medium Term Long Term

2011-18 2019-23 2024-28 2029-33 2034-38 2039-43

Traffic Growth Rates 5% 5% 5% 4% 4% 4%

Tariff

Dr Babasaheb Ambedkar International airport has crossed 1.5 million passengers per annum(mppa) during the year 2016, traffic stood at 15,95,241 passengers. As per the guidelinesissued by the competent authority, any airport crossing the 1.5 mppa, the tariff shall be set andgoverned by Airport Economic Regulatory Authority of India (AERA). In view of the same, theAuthority has submitted its user development fee (UDF) application on Hybrid Till (with 30% ofnon-aeronautical revenue will be used to cross-subsidise aeronautical charges), with AERA,pending approval. Details on the application has been provided in Annexure E



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It may be highlighted that the Authority has written to Ministry of Civil Aviation seeking its

approval on the tariff philosophy to be followed for determination of tariff.

City Side Development

On the basis of our initial estimates, with current airport charges, the Authority shall provide to

the Concessionaire additional land for commercial exploitation to the tune of 100 ha. The land

estimates are indicative and are liable based on the tariff approved by AERA.

The Concessionaire shall use the land parcel for its commercial use based on the land use laws

and other statutory state laws and may include earmarked for parking, fuel farm and utilities

infrastructure.

Project development – key terms

The Concessionaire shall undertake capacity augmentation as per the schedule (traffic trigger

points) mentioned below:

Phase At the end of year

II 2023

III 2031

IV 2038



Page | 21

Strength and Potential of the Project

Nagpur with its central location and fast growing service and manufacturing facilities is and ideal

location for a large hub airport as the trunk north-south and east-west highways and railways

also are crossing at Nagpur make it obvious to explore the multi-modal principle. This principle

will ensure trans-shipping of passengers and cargo between different modes of transport – rail

to road, road to rail, surface to air, etc. Their integration with International Passenger and Cargo

Airport facilities would make it very advantageous and cost effective for development of air

transportation

A typical hub airport operates on a wave principal. A wave of incoming flights will arrive within a

60-120 minute time frame connecting with a wave of outgoing flights 60 minutes later. This

hubbing coordination allows for the maximum combinations of flight pairs to be offered, giving

passengers a wider choice of destinations. Hubbing offers greater frequency (as well as

destinations) for connecting passengers. And for passengers local to a hub airport, the transfer

passengers supplement local demand, allowing the hub to offer a wider range and frequency of

direct services to and from the hub.

Nagpur has very good potential for becoming an International Hub Airport in view of its

geographic location. For the international hub and spoke traffic, the following routes have been

identified as potential Hub routes: Europe – S/E Asia & South Pacific; Africa – NE Asia; Europe

– SW Asia; North East / SE Asia & South West Asia.

On the domestic front Nagpur will act as a Hub for all North South East West traffic in India.

Nagpur probably has the best location in India from the point of view of sustaining domestic

hubbing. Nagpur Airport is expected to draw its due share from the available market for India,

depending on the kind of Infrastructure at Nagpur and the competition from existing and

proposed new hub airports such as Colombo, Greater Noida, Hyderabad etc.

Nagpur has the distinct advantage over other proposed Airports in terms of

► Low gestation period (on amount of the existing Airport),

► Expected rapid development of domestic Connectivity (on account of its unique location

to support domestic hubbing),

► Easy Access to almost 10% of Potential International Hubbing flights in the form of

currently flying over the city (accounted by almost 55 different airlines)



Page | 22

Annexures



Page | 23

Annexure A


Up-gradation, Modernization Operation and Maintenance of Dr. Babasaheb Ambedkar International Airport, Nagpur through PPP onDBFOT basis

Page | 24

Annexure B

Master plan of MIHAN Airport



Page | 25

Annexure C



Page | 26



Page | 27



Page | 28


Up-gradation, Modernization Operation and Maintenance of Dr. Babasaheb Ambedkar International Airport, Nagpur through PPP onDBFOT basis

Page | 29

Annexure D



Page | 30

Annexure E

Determination of Tariff and UDF in respect of Dr. Babasaheb Ambedkar International

Airport, Nagpur for the first Control period (01-04-2016 to 31-03-2021)

Tariffs at airports other than major airports4 are filed with Ministry of Civil Aviation (MoCA), while

those at major airports are filed with Airports Economic Regulatory Authority of India (AERA).

The passenger traffic for previous financial year i. e. 2014-15 have been used to determine the

tariff filing Authority. Since Nagpur airport is serving less than 1.5 million passengers in 2014-15,

tariff determination and filing comes under the purview of MoCA.

Consequently, MIHAN India Ltd. has prepared and filed the multi-year Tariff and UDF proposal

for the control period (01-04-2016 to 31-03-2021) to MoCA.

The methodology defined in AERA Guidelines help in determining the aggregate revenues

required by the airport operator based on the expected rate of return. The tariff is calculated

based on the Hybrid Till model as recommended by Draft Civil Aviation Policy. Post the

estimation of ARR, the present value of UDF has been arrived at for each year of the control

period. The average value of UDF is estimated which gives the value of UDF to be charged for

each year. The proposed tariff and UDF amount for the first control period is calculated based

on the following parameters. The resultant UDF for domestic and international Passenger has

been apportioned in the ratio 1:2.

The determination of UDF depends on the following factors:

1. The projected growth rate at which the passenger and aircraft movement traffic shall

increase during the control period

2. Non-aeronautical revenues - The model to be adopted for tariff filing is decided based on

the % share of NAR to be deducted from the calculation of aggregate revenue

requirement. The table below summarises the % of NAR in each case

3. As recommended in the Draft Civil Aviation Policy, Hybrid Till Model wherein 30% of

non-aeronautical revenue will be used to cross-subsidise aeronautical charges.

4. Increase in % of landing, parking and housing charges – The amount of UDF to be

charged will also depend on the year on year escalation of the typical aeronautical

revenues.

5. Cost of equity

6. Cost of debt

4 As per AERA Guidelines ‘Any airport which has, or is designated to have, annual passengerthroughout in excess of one and a half million or any other airport as the Central Governmentmay, by notification, specify as such‘



Page | 31

Proposed tariff structure:

The following tariff structure is proposed for approval by the Ministry:

S.# Base Case Remarks

Parameters

1. Hybrid Till 30% (NAR)

2. LPH % Increase 50%

3. Cost of Equity 18.5%

4. Cost of Debt 10.5%

5. PSF – facilitation Component Rs. 77

Result

1. UDF Domestic (INR/Passenger) 245.8

2. UDF International (INR/Passenger) 491.6

The table below provides the revised LPH charges:

I. Housing charges (International/Domestic charges)

Weight of

Aircraft

Rate per hour

(Amount in Rs.)

Revised Rate per hour

(Amount in Rs.)

Up to 40,000

Kgs

Rs. 3.50 per hour per 1,000 Kgs Rs. 5.25 per hour per 1,000 Kgs

40,001 Kgs to

1,00,000 Kgs

Rs. 140/- Plus Rs. 6.80 per hour per

1,000 in excess of 40,000 Kgs

Rs. 210/- Plus Rs. 10.20 per hour

per 1,000 in excess of 40,000 Kgs

Over 1,00,000

Kgs


per 1,000 Kgs in excess of 1,00,000

Kgs


per 1,000 Kgs in excess of 1,00,000

Kgs

II. Parking charges (International/Domestic charges)

Weight of

Aircraft

Rate per Hour

(Amount in Rs.)


(Amount in Rs.)

Up to 40,000

Kgs

Rs. 1.80 per hour per 1,000 Kgs Rs. 2.70 per hour per 1,000 Kgs

40,001 to

1,00,000 Kgs

Rs. 72/- Plus Rs. 3.40 per 1,000 Kg

per hour of 40,000

Rs. 108/- Plus Rs. 5.10 per 1,000 Kg

per hour of 40,000

Above 100 MT Rs. 276/- Plus Rs. 5.20 per 1,000 Kg Rs. 414/- Plus Rs. 7.80 per 1,000 Kg



Page | 32

Weight of

Aircraft

Rate per Hour

(Amount in Rs.)


(Amount in Rs.)

per hour in excess of 1,00,000 Kgs per hour in excess of 1,00,000 Kgs

III. Landing charges

1. International Flights

Weight of

Aircraft

(Amount in Rs.) Revised rates

(Amount in Rs.)

Up to 10,00 Kgs Rs. 122.10/- per 1,000 Kgs Rs. 183.15/- per 1,000 Kgs

10,001 Kgs to

20,000 Kgs

Rs. 1221/- Plus Rs. 179.30 per

1,000 Kgs in excess of 10,000 Kgs

Rs. 1831.50/- Plus Rs. 268.95/- per


20,001 Kgs to

50,000 Kgs

Rs. 3014/- Plus Rs. 354.20 per


Rs. 4521/- Plus Rs. 531.30 per


50,001 Kgs to

1,00,000 Kgs

Rs. 13,640/- Plus Rs, 413.60 per


Rs. 20,460/- Plus Rs. 620.40 per


Over 1,00,000

Kgs

Rs. 34,320/- Plus Rs. 471.90 per

1,000 Kgs in excess of 1,00,000 Kgs

Rs. 51,480/- Plus Rs. 707.85 per

1,000 Kgs in excess of 1,00,000 Kgs

2. Domestic Flights

Weight of

Aircraft

(Amount in Rs.) Revised Rates

(Amount in Rs.)

Up to 10,000

Kgs

Rs. 67.10 per 1,000 Kgs Rs. 100.65 per 1,000 Kgs

10,001 Kgs to

20,000 Kgs

Rs. 671/- Plus Rs. 117.70 per


Rs. 1,006.50/- Plus Rs. 176.55 per


Over 20,000

Kgs

Rs. 1,848/- Plus Rs. 231/- per


Rs. 2,772/- Plus Rs. 346.50/- per


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