Noida airport begins process to hire company to develop MRO hub (2024)

The Noida International Airport Limited (NIAL) has begun the process of hiring a company to develop a maintenance, repair, and overhaul (MRO) hub at the upcoming Noida International Airport.

The airport, which is anticipated to become operational by the end of 2024, aims to establish the MRO hub on a 40-acre site within its premises, part of the larger 1,334-hectare Noida aviation project, officials said.

A global tender has been issued by NIAL to invite proposals from expert agencies, to finalise a company to undertake the MRO facility’s development.“As per the concession agreement, the concessionaire is required to begin commercial operations of the MRO facility by 2030 so to make that happen within the timelines it needs to finalise the development company now through tendering procedures following the laid down rules. This MRO facility will be part of the aviation hub and will be developed on the premises of the airport in the ongoing phase,” said Arun Vir Singh, chief executive officer of the Yeida.

According to officials, the work on 40 acres of the site can start in the next two to three months once the contractor is finalised. The Noida International Airport Limited is likely to estimate the project’s cost and issue another tender to select a company that will develop an MRO hub on 1365 hectares of land that is being acquired by next month, said officials. This MRO hub will be developed in the second stage once the stage once work is completed by 2024 end, said officials.

“We will issue an Expression of Interest (EOI) next month for the development of a Maintenance, Repair, and Overhaul (MRO) hub adjacent to the upcoming Noida International Airport in Jewar. This MRO hub will be part of the airport’s second phase development and for this project, the government is acquiring 1,365 hectares of land,” said Singh.

The Uttar Pradesh government is nearing completion of the land acquisition process and will soon hand over the land to NIAL for further development. Singh also mentioned that discussions are underway with four major companies to encourage investment in the Jewar region, which is experiencing significant development due to the airport project. “The state government has introduced an exclusive policy to develop the area into an MRO hub, capitalising on the growing demand for MRO services driven by the increasing fleet size and passenger traffic in India,” Singh added.

Currently, major airports in India have limited or no provision for establishing MRO hangars within or near their premises. However, the Noida International Airport will include both an MRO facility within the airport and a larger facility adjacent to it. Singh highlighted the sector’s potential, noting that maintenance costs account for approximately 12% to 15% of overall revenue.

A 2023 report by NIAL highlighted Uttar Pradesh’s multiple benefits for MRO hub development, including the state’s capital investment subsidy, the presence of the Defence Industrial Corridor, and the availability of skilled manpower. The UP MRO policy specifies that the capital investment subsidy will be 5% for investments up to ₹500 crores, 8% for investments over ₹500 crores but less than ₹1,000 crores, and 12% for investments exceeding ₹1,000 crores, subject to a maximum of ₹200 crores. To qualify for these subsidies, the MRO facility must commence commercial services within five years from the issuance of the letter of comfort—a document assuring that a party will meet its financial or contractual obligation.