The aviation sector has seen much transformation after liberalisation. From being government-owned, the domestic airline industry is now dominated by privately owned full-service airlines and low-cost carriers. In the past ten years, private airlines have changed the rules of the game, and they now account for more than 75% of the domestic air traffic.
The rapid growth of the airline industry leaves vast scope for airport infrastructure to develop and modernise. In India, metropolises have flourished as the nerve centres of all major economic and commercial activities. Poor air connectivity at tier-I and tier-II cities have made them inaccessible, and consequently, less attractive for prospective investors. This has led to an imbalanced growth of the urban economy.
However, with the population in key metros rising beyond permissible limits, tier-I and II cities have to prepare for the future. The aviation industry, which was limited to major cities, has now spread its wings to smaller cities, as they hold vast untapped potential.
A key plank of airport development was privatisation. Though the government has taken many initiatives in alliance with the private sector for capacity augmentation, such as modernisation and upgradation of existing airports and development of greenfield airports, project implementation is woefully tardy. While airport modernisation received an enthusiastic response from private companies, non-metro airports and greenfield projects are virtually stuck, owing to doubts about the commercial viability of these projects.
In this backdrop, the concept of aerotropolis emerges an interesting and viable model for airport development. The term aerotropolis means airport cities and has been popularised by American academician John Kasarda. It is a city of which the layout, infrastructure and the economy are centred on a major airport. In its simplest form, the aerotropolis is an economic hub that extends out from a large airport into an adjoining area that consists mostly of distribution centres, office buildings, manufacturing firms, convention centres and hotels, all linked to the airport via roads, expressways (aero links), and rail lines (aerotrains). These aerotropoli are powerful engines for promoting local economic development and a good source for attracting foreign investments.
Unlike conventional airports, an aerotropolis leads to the parallel growth of other prominent sectors like real estate, hospitality and manufacturing industries. Over the years, aerotropoli have come up in a big way in different corners of the world. Some of the most developed aerotropoli are found in the rising economies of Asia and Middle East, and typically in city-states such as Hong Kong, Singapore and Dubai. They have gained immense popularity for the fact that in addition to their traditional services, major airports have developed significant non-aeronautical commercial facilities, services and revenues.
The concept of aerotropolis, though at a nascent stage, is gaining momentum in India. This is because aerotropolis is a more viable investment option than stand-alone airports. In an aerotropolis, a major share of revenue comes from non-aeronautical components such as real estate, hospitality and tourism, which yield faster returns than the aeronautical components. In this model, even though the aeronautical part has a long gestation period, the financial standing of the developer is not affected because of returns from allied/non-aeronautical developments.
A premier initiative in this concept is the Durgapur Aerotropolis. The Asansol-Durgapur region in West Bengal has emerged as a natural choice for an aerotropolis. The region has existing facilities and new opportunities in the fields of metalwork, power-intensive industries, mining, iron and steel, engineering, petrochemicals, and information & communication technology (ICT). It is also a natural epicentre of the geographical region, defined by the new industrial areas of Bankura and Purulia to its south, Birbhum to its north, Hooghly to its east and the mining areas of Dhanbad-Bokaro to its west.
Durgapur Aerotropolis has been designed to have an airport that could be leveraged to nurture industrial, IT and logistics-based activities. The plan is to build a new industrial and urban centre around an airport with tightly woven inter-dependencies.
The West Bengal government has approved the project as it would meet the needs of an airport in the Durgapur?Asansol planning area, and also the industrialisation and urban needs of the region. According to the state government, the proposed aerotropolis will lead to: (i) the emergence of new metro destination in eastern India; (ii) fresh investments in industries and services such as information technology and allied sectors; (iii) efficient air connectivity for the region; (iv) mitigation of shortfall in housing units; (v) demonstrate the state government?s commitment to meaningful growth through innovative initiative; (vi) and enhance employment opportunities within the region.
Durgapur Aerotropolis has been designed as a unique infrastructure project on 2,346 acres where a greenfield airport of code 4C is being built, around which there would be other components like a logistics hub, industrial park, IT park, commercial zone and social infrastructure like school, colleges, hospitals, golf course and theme park.
The Indian aviation industry is on the verge of a metamorphosis. After decades of haphazard development around old airports, time has come for the idea of aerotropolis.
?The writer is director, Bengal Aerotropolis Projects Ltd