The JV partners are the Airports Authority of India (AAI) and Maharashtra Airport Development Company (MADC) Ltd, set up by the Maharashtra government.

Home Minister P Chidambaram said the venture would now invite a partner for a second JV that would undertake the modernisation programme. The partner would be selected on a competitive basis and would have a 76 per cent stake. The rest would be with the venture that was approved on Wednesday.

The JV will develop a world-class passenger and cargo hub in Nagpur through the PPP (public-private partnership) model, Chidambaram said. The second JV will also have to be approved by the Union Cabinet.

The project is planned to be developed in three phases. The capital cost of the project over the period up to 2035 is estimated at Rs 3,327.5 crore (Rs 33.27 billion). This includes the cost of land acquisition and rehabilitation of the project-affected people as well as shifting of IAF assets.

The airport will be backed by many economic value-addition activities and all of them, including the airport, will be covered by a special economic zone spread over 2,453 hectares. The cargo hub will have an inland container terminal, a truck terminal, financial institutions, and convention and exhibition centres.

According to the techno-feasibility study, the domestic air traffic at Nagpur will grow 18 per cent every year between 2008 and 2010, 15 per cent from 2010 till 2015, and 3 per cent from 2015 to 2035-40.