Govt Grounds Second Intl Airport Plans For Delhi, Mumbai, Chennai

New Delhi, May 19: | Updated: May 20 2002, 05:30am hrs
The government has decided against setting up second international airports in or around Delhi, Mumbai and Chennai.

Tamil Nadu and Uttar Pradesh governments have been pursuing the Centre for clearing their proposals to set up new international airports at Chennai and Greater Noida, respectively. The civil aviation ministry is also against setting up of a new airport in Mumbai.

The ministry feels that setting up of second airports will affect the leasing out process of the airports in these three cities. The Centre has informed Tamil Nadu government that the privatisation process of the four international airports in the metros was at an advanced stage and is expected to be completed by the end of this fiscal.

“Any independent major project taken up at this stage may create problems for the existing airports and also affect their viability,” said a senior ministry official.

“There was no justification for a new international airport near Delhi as the existing airport can fulfill the future demands on a long-term basis with the required expansion when needed,” sources said.

The UP government has been asked to undertake a techno-economic feasibility study so that the airport can be located along the proposed Taj expressway.

The civil aviation ministry is also planning to put in a clause in the bidding process which would give the first right of refusal to the private company operating the airport, he added.

The Centre has already started the restructuring process at major airports to upgrade them to world-class standards by giving them on a long-term lease.

The government feels that any major project, if taken up at this juncture, may jeopardise the leasing exercise, and adversely affect efforts to improve the existing airports to global standards.

The government has recently kicked off its airport privatisation programme with roadshows in Delhi and London, where major global operators registered their interest.

Government sources said that global airport operators, including those managing Frankfurt airport, Heathrow airport at London, Singapore and Malaysia and Charles de Gaulle in Paris, have evinced interest till now.

Each bid will be a consortium comprising of foreign airport operator, financing company and a construction firm.

The proposed payment structure would consist of two components: an upfront payment and an annual payment linked to traffic volumes.

The government is planning to give out metro airports — Mumbai, Delhi, Kolkata and Chennai international airports on a long-term lease of 30 years. The modalities of leasing out these airports in terms of the transaction structure, payment terms and other details were discussed in these roadshows.

“Later, after the shortlisting is done, we will give these companies access to our data rooms for a due diligence”, sources added.

Financial consultants, KPMG have been appointed as advisors for the exercise.