Zurich Airport Wins Bid for Jewar Airport Overstep Adani

Highlights:

• Zurich Airport International AG will develop the Jewar airport on the outskirts of Delhi
• Noida International Greenfield Airport will be cover over 5,000 hectares while fully built at an expected cost of Rs 29,560 crores.
• The Swiss firm will invest more than Rs 4,663 crores for the airport’s first phase, which will take four years to be completed
• 1st phase of the project is due to be operational by 2023 and it will manage 12 million passengers/year
• The 2nd phase of the Jewar airport is due to be completed by 2031, while the 3rd and 4th phases are due to be completed by 2036 and 2040, respectively
• The selection for bidders has been made on the basis of premium per passenger submitted by the 4-bidders
• The final tender still requires to be granted by the airport’s project monitoring and implementation committee on 2nd December 2019

On 29th November 2019, Switzerland’s Zurich Airport International AG known for Switch Clockwork-precision operating at its flagship Zurich Airport came out as the highest bidder for the proposed international airport at Jewar, Noida, Uttar Pradesh, overstep competitors like Adani Enterprises Ltd, DIAL, and Anchorage Infrastructure Investments Holdings Ltd by offering the highest bid sparking hopes for the long-delayed project and the development of the area around it.

Noida International Greenfield Airport will be cover over 5,000 hectares while fully built at an expected cost of Rs 29,560 crores. The airport is likely to have 6 to 8 runways highest in India when fully developed.

Less than 3-years back, Austria-born Arnold Schwarzenegger, Flughafen Zurich AG (FZ) has promised while exiting Bengaluru’s Kempegowda International Airport (KIA). It is likely to build and operate the Noida’s Jewar Airport.

As per Noida International Airport Ltd (NIAL) official, the 1st phase of the project would be spread over 1,334 hectares and due to be operational by 2023 at a cost of Rs 4,588 crores, when it will manage 12 million passengers/year.

According to a NIAL official, Zurich Airport defeated the other three bidders – the GMR Group-led consortium including Delhi International Airport Ltd (DIAL), besides Adani Enterprises Ltd and Anchorage Infrastructure Investments Holdings Ltd by proposing the highest bid.

Apart from Zurich, FZ operates 8-airports in Latin America and describes India, Indonesia, and the Philippines.

The selection for concessionaire has been done on the basis of premium per passenger (pax) offered by the four bidders.

While Zurich Airport offered a revenue share of Rs 400.97 per passenger, GMR Group-led DIAL, which had the right of the first rejection, offered Rs 351. Adani Group and Anchorage’s bids held at Rs 360 and Rs 205/passenger, each.

The final tender still requires to be granted by the airport’s project monitoring and implementation committee on 2nd December 2019, but this is expected to be a formality only, said a NIAL official, requesting anonymity.

Zurich Airport said it will design, develop and operate the new greenfield airport in Jewar under a 40-year franchise. It will invest Rs 4,663.731 crores for the 1st phase, which will take 4-years to be developed.

Daniel Bircher, CEO of Zurich Airport (Asia operations), told “We see India as a huge upcoming market with great potential. Jewar Airport in Jewar, Noida will be able to provide its services to the enormous crowd of Delhi as well as Uttar Pradesh. Apart from this, Noida and Greater Noida are developing as big industrial hubs and will be a huge catchment area demanding air connectivity soon.”

The Jewar airport will be the National Capital Region’s 3rd after the Indira Gandhi International Airport (IGIA) and Ghaziabad’s Hindon. The new airport will be 100 km away from Delhi airport. It is considered as the capital’s only international airport so far.

The 2nd phase of the Jewar airport is due to be completed by 2031 and will increase its capacity to 30 million passengers/year, while the 3rd and 4th phases are due to be completed by 2036 and 2040, respectively. It will further improve its capacity to 50 million and 70 million passengers/year, respectively.

They built a no-frills airport in Bengaluru contrary to the up-to-date more luxurious Hyderabad and later built Delhi’s T3 or more elegant Mumbai’s T2 that passengers could quickly enter and exit.

Real Estate Analysts View:

The development of Jewar Airport is a positive sign for the aviation sector. Crisil Infrastructure Advisory’s Director, Jagannarayan Padmanabhan said: “It will be important that external connectivity is addressed on a war footing and an unencumbered site for development is also given to the concessionaire at the earliest.”

A real estate advisor was, however, cautious about the move. “Until there are clear indications of construction work at Jewar, the potential for other real estate developments, such as residential, commercial or retail, will remain on hold,”

Developers bought a large portion of land in the neighborhood many years ago. They expected to cash it on the airport project when it was declared in 2001. But seeing the pace of development, they may avoid launching commercial and residential projects due to oversupply, said Santhosh Kumar, vice-chairman, Anarock Property consultants.

Another analyst said he was positive about the area’s potential, in spite of the chequered history.

Mudassir Zaidi, executive director-north, Knight Frank India, a real estate consultancy added, “We have seen in the case of Gurgaon, how closeness to the airport profited the real estate sector in the city,”.

“There is certainly a need for another airport in the NCR, given its geographic spread of NCR. Property prices tend to increase once an infrastructure project is announced. In the case of Jewar airport, we will witness real growth and appreciation now.”

These could lead to the Noida-Greater Noida area emerging on a par with Gurgaon in the future, he added.

About the Jewar Airport project:

The Jewar Airport is an upcoming greenfield airport in Jewar in Greater Noida. It will be the 2nd in the NCR region after Delhi’s IGI airport. The airport is supposed to be developed across 5,000 hectares of land and its estimated cost will be Rs 29,560 crores. According to officials, the recommended plan is to build a two-runway airport by 2022-23 and then, at a future date, to extend it to a 7200-acre 6 to 8 runway airport.

Implementing Agency:/h2>

The Yamuna Expressway Industrial Development Authority (YEIDA) was appointed as the implementing agency on behalf of the Uttar Pradesh government in 2017. The airport is to be built on a Public-Private Partnership model (PPP).

YEIDA has assisted to provide an elevated road, a direct Metro corridor from Indira Gandhi International Airport to Jewar, and a Rapid Rail Transport System (RRTS) network. The company has cataloged 5,100 hectares for the project, out of which 240 hectares belong to the state government and rest is with private owners.

Sources: Google