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The Maharashtra government is learnt to have decided to stall all work concerned with the project though it is still keen on setting up the special economic zone and the captive power generation facility.
The project's future is in jeopardy due to the reluctance of the Civil Aviation Ministry and the Indian Air Force in giving up their respective airfields, the Nagpur Airport and the Gajraj base for the project.
The Maharashtra government, in accordance with a tripartite agreement between the state, the Aviation Ministry and the IAF, was to provide additional alternative land to the IAF for relocating the Gajraj base, but has not acquired the land yet.
The Maharashtra Airport Development Company headed by vice chairman and managing director R C Sinha is the nodal agency for the Multi-modal International Air Cargo and Passenger Hub at Nagpur project. Sinha has demanded that the Nagpur airport be handed over to the MADC so that further work could be undertaken.
However, the Civil Aviation ministry has so far deferred the handing over. Civil Aviation Ministry Praful Patel was so annoyed at persistent questions on the issue that he lost his temper at a media briefing and went to the extent of describing Sinha as a "non-expert in aviation matters".
The minister asked the Maharashtra Government and MADC to acquire land adjoining the existing airport and settle the issue of alternative land for the Gajraj base of the IAF.
Patel said before acquiring the land needed for the project it could not move an inch forward and wondered why there was such a hurry in taking over the Nagpur airport.
Patel said that the airport handles over 600 planes which use the airspace under the Nagpur ATC and asked who was going to take care of the sovereign obligation of the Government of India in implementing various international treaties under which ground support was provided to the aircraft.
"I hail from Vidarbha and my commitment for development of Vidarbha region is far more serious than that of Sinha," Patel said.
On the issue of waiver of Rs 250 crore (Rs 2.5 billion) stamp duty granted by Maharashtra government to the Airports Authority of India, Patel pointed out that the old property of AAI was transferred to a new government entity and this was national stamp duty, which was waived by the government.
He said several other state governments had also waived similar stamp duty for infrastructure projects.
Patel clarified that the AAI was already implementing its Rs 60 crore (Rs 600 million) airport modernisation plan and would consider the demand of the MADC when the two issues of land acquisition for the project and providing an alternative site for the AIF were complete.
Patel also said that the affidavit filed by his ministry before the High Court had correctly pointed out that the issue of airport handing over is to be finally approved by the Union Cabinet.
Sinha admitted that the project was stuck up and the state government had decided to stay the swap deal till it gets an assurance of getting land from both the IAF and the Civil Aviation Ministry.
He also said that the project could not take off until the land swap is effected. In case the land is not handed over the project may have to be abandoned, Sinha said in reply to a question. Other allied plans of the SEZ, the captive power plant, rail and road terminal etc would still come up.
The MADC wants the airport land to develop terminals and other facilities required to handle air traffic generated after the cargo hub becomes functional. Additional runways have to be constructed close to the airport, inform MADC officials here.
Without a second runway there are even doubts about the aircraft maintenance, repair and overhaul projects -- like that planned by Boeing Inc here - may ever come up, said a source with the MADC. The MADC has spent around Rs 400 crore allotted by the State Government for the project.
Meanwhile, the IAF too is insisting that a suitable alternative land be made available to it soon. The IAF wishes to invest in the Gajraj base - which handles the giant IL 76s - and is unwilling to do so if the base has to be shifted. It has told the government that it would not shift the base if forced to make the investment.
Funds for further development at the transport base have already been earmarked in the IAF budget and the Air Force is merely waiting for the alternative land. "We cannot wait indefinitely," it has told the state government.