Subhash Goyal-led Essel Infraprojects has renewed its interest in the upcoming Navi Mumbai and Goa airports and has tied up with ADC&HAS Airports Worldwide, a US-based company which runs airports in Ecuador, Costa Rica and Korea. It is a joint venture of Houston Airport System, Airport Development of Canada and Omers, a Canadian pension fund.
Jorge Roberts, ADC&HAS Airports Worldwide's director (project development) said India remains an attractive investment destination despite the delays and regulatory problems.
Essel Group along with TAV group had unsuccessfully bid for Mumbai airport privatization in 2005. "We are patient. We long term investors,'' he said adding that the equity structure between them and Essel will be finalized after the issue of request for proposal document (RFP) documents are issued. He said India is a stable democracy and the company is operating in far more difficult markets like Ecuador which has seen successful and failed coup bids recently. "Our objective is to build airport that is financially feasible and competitive. It is not about how the airport looks or its size.
We are backed by third largest pension fund from Canada and have financial wherewithal for large scale investment,'' he added. Even Fraport, airport operator based in Frankfurt and Zurich airport are eyeing Navi Mumbai airport. Fraport, airport operator based in Germany, which has 10% share in Delhi airport, about to exit Delhi airport has also showed interest in Navi Mumbai Airport. According to Kai Zobel, Global Investments and Management Vice President of Fraport AG, “We will be exiting from Delhi airport by the end of second quarter or at most third quarter of 2013. We are in talks with GMR over the valuation of the stake. We believe some improvements have to be done by Indian government in terms of clarity over the regulatory framework.” I think there should be more guidance from official regarding land and all those things have to be solved before you attract an investor. When we bid for Navi Mumbai, we will be looking for Indian partner if there is a legal requirement. As an investor we would be looking at better guidelines and structured plan. We will be expecting equity return in double digit, he added. Regarding the interest about equity stake in Navi Mumbai airport, Zobel evaded giving a clear answer, “We will have to evaluate that. It is always nice to have at least 30%, then you can make some decisions.” Zurich Airport, which is also interested in Navi Mumbai airport emphasized on clear regulatory framework in India. Christian Sigg, Vice President, International Business Development of Zurich Airport, said, “There are issues regarding land acquisition, land side access and traffic split (between Mumbai and Navi Mumbai ) that need to be addressed.” We haven't set upper limit for investing in India. If the project is viable for us we are willing to invest more than $50-100 million, he added.