New Delhi: A move by India's airport regulator to limit the cost of constructing terminals and runways is likely to impact new projects and expansion of existing facilities in the country.
The Airports Economic Regulatory Authority (AERA) capped the cost of building a terminal at Rs 65,000 per square metre, a restriction that's set to impact the construction of new airports in Goa and Mumbai and the expansion of the airport in Bengaluru.
The regulator approves the construction cost of all major airports. "Such a limit is too low. It will be very difficult to build an airport within this cost. States have raised concerns with us, too, and the government of Karnataka has also written to us," said a senior aviation ministry official who did not want to be identified.
The official said a basic airport can be built at this cost but not a hub as in the case of New Delhi, Mumbai, Hyderabad and Bengaluru. Industry experts said construction costs depend on various factors and a decent airport would cost at leastRs 100,000 per sq m to be built.
AERA's order issued in June this year said the regulator's estimate was based on analysis of various factors and costs submitted by operators.
11/08/16 Mihir Mishra/Economic Times
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The Airports Economic Regulatory Authority (AERA) capped the cost of building a terminal at Rs 65,000 per square metre, a restriction that's set to impact the construction of new airports in Goa and Mumbai and the expansion of the airport in Bengaluru.
The regulator approves the construction cost of all major airports. "Such a limit is too low. It will be very difficult to build an airport within this cost. States have raised concerns with us, too, and the government of Karnataka has also written to us," said a senior aviation ministry official who did not want to be identified.
The official said a basic airport can be built at this cost but not a hub as in the case of New Delhi, Mumbai, Hyderabad and Bengaluru. Industry experts said construction costs depend on various factors and a decent airport would cost at leastRs 100,000 per sq m to be built.
AERA's order issued in June this year said the regulator's estimate was based on analysis of various factors and costs submitted by operators.
11/08/16 Mihir Mishra/Economic Times
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