Many operational challenges in airport modernisation remain

Font Size

Print

Feedback

Email

Discuss

: The Indian civil aviation sector is showing a phenomenal uptrend with double-digit growth rates. Passenger traffic rose by 25-30% in 2005-06 and is expected to grow by 25% year-on-year over the next five years. However, airport infrastructure has not developed simultaneously, resulting in traffic congestions and delays at most airports.

To revamp the airport infrastructure, the government has envisaged a modernisation plan with an investment of Rs 40,000 crore to Rs 50,000 crore by 2009. It has appointed advisors to assist in raising Rs 4,000 crore over the next three years. This is expected to fund the modernisation of select 25 non-metro airports. The Essential Air Service Fund is also being set up on the lines of the successful model of the Central Road fund. This fund will levy a cess on domestic and international travel to support the country’s airport infrastructure.

However, the most remarkable step taken by the government has been the selection of private partners for the development and up gradation of airports. The important Delhi and Mumbai airport development projects are being undertaken through private-public partnership ventures. GMR consortium has been selected for the Delhi airport and GVK consortium for the Mumbai airport. The Airports Authority of India (AAI) has a 26% stake in these joint venture companies while the remaining 74% is with the private partner.

Preliminary estimates suggest that a capital investment to the extent of Rs 7,961 crore and Rs 6,131 crore will be required for these two airports over a period of 20 years. A significant portion of the financing has already been secured from banks and sponsors of the JVCs for implementing the first seven years of Initial Development Plan.

While the finances and plans for airport modernisation have been established to a great extent, there are still several operational challenges, which must be considered. These are:

• Responsibility of evacuating encroached land is on the JVCs. This would prove difficult vis-à-vis the government or AAI and could lead to considerable delays in the whole process, especially in Mumbai.

• Tariff increases beyond the third year are proposed to be set by the government / Airport Economic Regulatory Authority. AERA is yet to be established and the norms for tariff- setting are uncertain.