Cabinet approves Nagpur airport modernisation push

Modi Cabinet Clears Long-Awaited Push for Nagpur Airport Modernisation; CM says govt will build a beautiful and world-class airport, Project targets 30 million annual passengers

NAGPUR: The Union Cabinet on Wednesday approved the extension of the Airports Authority of India (AAI) land lease to MIHAN India Limited beyond Aug 6, 2039, paving the way for the long-term modernisation and expansion of Dr Babasaheb Ambedkar International Airport under the Public Private Partnership model.

The long-awaited decision came over one and a half years after Prime Minister Narendra Modi laid the foundation stone for the upgradation on Oct 9, 2024, via video conferencing.

The decision will allow MIHAN India Limited to grant a 30-year concession to GMR Nagpur International Airport Limited from the Commercial Operation Date, marking a big step in transforming Nagpur into a major aviation and cargo hub under the Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) project. This decision brings much-needed clarity to a project set to be a gamechanger for the region.

An elated chief minister Devendra Fadnavis said the state govt was making every effort to develop a major brownfield airport in Nagpur. “Only a few clearances were pending for the airport transfer. I thank Prime Minister Narendra Modi and the Union Cabinet for approving the project today. We will build a beautiful and world-class airport in Nagpur,” he told reporters.

Nagpur airport director Abid Ruhi, who has been associated with the project since its inception, told TOI that the Centre’s approval would significantly boost the city’s overall development. “GMR will not only renovate the existing airport but also build a new international-standard terminal. It will construct a second runway and provide facilities comparable to top airports. The second runway will strengthen Nagpur’s ambition of becoming a logistics capital,” he said.

The Cabinet approval comes after a prolonged legal and administrative process spanning more than a decade. MIHAN India Limited was formed in 2009 as a joint venture between the AAI and the Maharashtra Airport Development Company with a 49:51 equity structure. Although airport assets were transferred to the joint venture in 2009, execution of the land lease deed was delayed because of land demarcation issues.

In 2016, MIHAN India Limited floated a global tender to identify a private operator for the airport under the PPP model. GMR Airports Limited emerged as the highest bidder with an initial revenue-sharing offer of 5.76%, later revised to 14.49% of gross revenue. However, MIHAN India Limited annulled the bidding process in March 2020, triggering litigation.

Key Takeaways:

• Union Cabinet approved extension of AAI land lease for Nagpur airport
• Decision enables 30-year PPP concession to GNIAL
• Project falls under MIHAN aviation and cargo hub initiative
• MIL formed in 2009 by AAI and MADC with 49:51 equity
• GMR Airports emerged highest bidder in 2016 global tender
• Tender annulment in 2020 later overturned by courts
• Supreme Court ruled in favour of GMR in Sept 2024
• Concession agreement signed on Oct 8, 2024
• Airport planned for 30 million annual passenger capacity
• Cargo handling and regional connectivity expected to improve significantly

The annulment was challenged before the Nagpur bench of Bombay High Court and later upheld in favour of GMR by the Supreme Court in its Sept 27, 2024, judgment. Following the verdict, the concession agreement was signed between MIHAN India Limited and GMR Nagpur International Airport Limited on Oct 8, 2024.

Officials said the latest Cabinet decision aligns the lease tenure with the full 30-year concession period, enabling the formal transfer and phased development of the airport infrastructure.

Under the proposed expansion plan, GMR Nagpur International Airport Limited will undertake phased modernisation aimed at increasing the airport’s ultimate handling capacity to 30 million passengers annually. The project also seeks to substantially strengthen cargo handling infrastructure, positioning Nagpur as a strategic logistics and aviation centre in Central India.

The modernisation plan, which includes state-of-the-art facilities for international cargo and passenger services, promises to place Nagpur firmly on the map as a strategic logistics hub, enhancing both domestic and international connectivity. The decision also represents a major step forward in the city's infrastructure ambitions and could set the stage for future investment and development in the region, as per the MADC officials.

The expansion is expected to improve regional connectivity across Vidarbha while boosting economic activity linked to trade, logistics, manufacturing and services. The Centre described the project as part of its broader push for infrastructure-led growth and enhanced private participation in the aviation sector.