After more than a decade without any worthwhile investment for developing airports’ infrastructure, India’s aviation sector is on the move again. More than five years ago, a bold policy decision was taken by the government to encourage private investment in the sector along the public-private partnership model (PPP).
This opened the gates for attracting private entrepreneurs to invest in airports and airline infrastructure.
The ministry of civil aviation has estimated that domestic traffic in India by 2020 could be of the order of 160 million passengers with international traffic likely to exceed 50 million. India’s aircraft requirement by 2020 is estimated to be 1,000-odd aircraft in a mix, depending on the traffic circuits and economic development of various regions.
The investment projected in airports in the period is of the order $30 billion (Rs 1.35 lakh crore) and investment in aircraft procurement about $90 billion (about Rs 4 lakh crore). Considering such heavy investments, the government decided to induct private equity in the development of the aviation sector, which, till then, had been financed only through the government’s budgetary support.
As a result of the government’s policy to bring private capital for the development of airport infrastructure, Delhi and Mumbai airports have completed their first phase of development with private investment of about Rs 20,000 crore and need investment of a similar order for the next phase of development.
As of now, Mumbai International Airport is already saturated with no possibility of expansion due to land constraints. A greenfield airport (a new airport that’s built from scratch in a new location) in Navi Mumbai has been approved. This will need an additional investment of Rs 11,250 crore.
The two greenfield airports in Bangalore and Hyderabad, developed recently by private groups with an investment of about Rs 15,000 crore, have started operating. In addition, a bigger new international airport for Chennai is being developed at about Rs 10,000 crore to meet the air transport needs of Tamil Nadu for the next 20 years.
21/04/11 HS Bhatia/Hindustan Times
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