India's Airport Expansion Stuck on the Runway

Those who have recently travelled through the spanking new domestic Terminal 1D at Delhi or the barely 12-month-old airports at Bangalore and Hyderabad know that world class infrastructure is possible in India. But travel by air through the country and you cannot escape the impression of how much still remains undone.
India's Ministry of Civil Aviation has estimated that the country needs an infusion of no less than U.S. $8 billion-$10 billion in its airport infrastructure to upgrade and modernize, expand its existing airports as well as building new ones.
Almost half that amount ($4.8 billion) will be sucked up by private companies who have built the airports at Kochi, Bangalore, Hyderabad and are in the process of vastly expanding the country's biggest aerodromes at Mumbai and Delhi. Delhi's new airport will have the capacity to handle 100 million passengers a year when it reaches its saturation point some time around 2026.
“In the current economic climate, that's not something any government should take lightly.”
With government debt estimated to rise to a dizzying $680 billion by March next year, there seems to be little chance of the government throwing in the missing billions of dollars needed to sort out the creaking aviation infrastructure in the country.
It's all the more surprising, then, that well-intentioned plans by the government to develop 35 smaller airports (so called non-metros) following the public-private partnership approach have come to nought.
Much time and effort has been invested by bidders, potential investors, central and state government officials, aviation consultants and other stakeholders to draft a Master Concession Agreement. It was to serve as a model for the transparent and efficient award of contracts – and, equally important – for the swift development of the selected airports.
Five companies including Anil Ambani-led Reliance Energy, Larsen & Toubro, Fraport AG (my company), Tata Infrastructure and Lanco Infrastructure had been shortlisted for the upgrading of Amritsar airport located in Punjab near the border with Pakistan.
We've been waiting for nearly two years without any information when or how the process would proceed. Strong opposition from the Airports Authority of India which does not want to see any more of its airports move into private hands and the Left Parties are the most plausible reasons for the government's procrastination and, if one is to believe unofficial sources from the AAI and MoCA, the likely scrapping of the bidding process altogether.
29/04/09 Ansgar Sickert, Managing Director,Fraport India/Wall Street Journal, US

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Categories: Airports Apr 2009