Home » We have planned Rs.17,500 crore capex

We have planned Rs.17,500 crore capex

We have planned Rs.17,500 crore capex

Dr Guruprasad Mohapatra, Chairman, Airports Authority of India (AAI) says the National Civil Aviation Policy (NCAP) would provide a boost to airport development. He asserts that future greenfield and brownfield projects in the sector will be cost-effective, withoutthe user safety or security being compromised. 

What is AAI doing to ensure that the country reaches its stated target of becoming one of the top three aviation markets by 2026?
AAI, being the extended arm of the government, is geared-up to address the huge traffic growth that the country is witnessing. As per the forecasts, the growth is expected to continue in the future. AAI has firm plans for augmentation of airport infrastructure in India with a CAPEX of around Rs 17,500 crore in a period of five years to create additional capacity of 154 million passengers per annum (MPPA) in the next four to five years, in which 56 MPPA additional capacity will be created in AAI airports like Chennai, Srinagar, Pune, Dehradun, Lucknow, Mangalore, Jaipur, Goa, Agartala, Guwahati, Leh, Patna, Trichy, Vijayawada, Port Blair, Calicut, Trivandrum and Jabalpur; 98 MPPA additional capacity will be created in joint venture, private and state government airports. To facilitate more number of aircraft being brought in by the airlines, we have also planned additional 191 aircraft parking bays at AAI airports for smooth operations and providing night parking facilities.

With a view to expedite project implementation, AAI is in the process of awarding Project Management Consultancy (PMC) for expansion of 13 airports namely Chennai, Srinagar, Pune, Dehradun, Lucknow, Jaipur, Goa, Guwahati, Leh, Patna, Trichy, Vijayawada and Jabalpur, and plans have been made for expansion of another 12 airports, where the work will be taken up subject to availability of land.
NCAP is of course an enabler for the entire aviation industry that will drive the aviation sector in future for attaining the leadership position across the globe.

Will the plans to open 50 disused airports and approval to another 18 greenfield airports help to decongest India’s busiest metro airports?
The operationalisation of 50 airports under the UDAN Scheme will definitely improve connectivity and traffic situation in tier-II and III airports. However, the flipside is that the passenger traffic will grow and create additional demand on metro as well as other major airports.

There are already plans afoot to decongest the airspace and airports by adopting various measures both at ground and in air. This is a collaborative effort where all the stakeholders, viz, airlines, airport operators, air navigation services and the regulator have to chip in.

Airlines are required to adhere to the specified block times and slots to avoid bunching of flights. They will also have to adjust the slot timings and, in some cases, shift the night parking to smaller airports to avoid congestion. Air navigation services are being improved for making the operations efficient through provision of technology and advanced procedures to avoid delays, which also contribute to congestion. Air traffic flow management has been introduced to balance the demand vis-a-vis the capacity so that the airport operates at optimum capacity throughout. Airport operators are required to provide additional capacities both in terminals as well as on air side in respect of runways, taxiways, aprons, etc.

The regulator has to chip in wherever regulations need to be mandated for adherence by all concerned to avoid delays.

With a view to address the situation, second phase of development is planned at Delhi, Hyderabad, Bengaluru, Chennai, Kolkata and other major airports. Greenfield airports at Navi Mumbai, Mopa (Goa) and other locations approved by the government will create sufficient capacity to cater to additional traffic.

Apart from this, the processing and queuing times for the passengers are being improved to provide relief from congestion. Progressive use of cutting edge technology and best practices for gate-to-gate movement of passengers will also help in easing the congestion at these airports.

The Ministry of Civil Aviation has initiated a ‘DigiYatra’ project for uniform implementation at all airports to reduce the processing time at the airports through faster check-in and security clearances digitally. The proof of concept is being tested and, finally, the system will be unrolled in a phased manner.

What will it take to enhance PPPs in the sector?
The government of India envisaging the growth of air traffic vis-a-vis availability of resources, talent, governmental or bureaucratic interference and a paucity of professional management, recognised the need for reforms and decided to invite private investment into India’s civil aviation infrastructure. Simultaneously, open sky policy and FDI norms were introduced in a liberalised environment.

The private sector, including foreign investors, were attracted to participate in the operation, management and development of Indian airports through various public-private partnership (PPP) models, with substantial state support in terms of financing, concessionary land allotments, tax and other incentives. This helped to produce world-class airports at Mumbai, Delhi, Kochi, Hyderabad and Bengaluru, both brownfield and greenfield, which together account for over 60 per cent of the nation’s air traffic.

More recently greenfield airports have been developed at Durgapur and Kannur with private participation. The state governments of Maharashtra and Goa have taken up new green field airport projects at Navi Mumbai and Mopa, respectively. The Government of India has further approved about 18 greenfield airport projects, which may also be taken up with private participation. AAI is also undertaking development of new greenfield airports and the airport at Pakyong (Sikkim) is almost ready. AAI plans to take up a greenfield airport in Arunachal. As a policy, AAI takes up greenfield projects whenever state governments provide the required land free of cost.

With respect to brownfield airports owned and operated by AAI, after lot of deliberations at various levels it was considered prudent to bring in professional expertise through Operations & Management (O&M) model initially at Jaipur and Ahmedabad airports to bring in operational efficiencies, besides enhancement of non-aeronautical revenue. In view of the rate of growth, airport infrastructure is an area that needs immediate attention. NCAP aims at the development and modernisation of airports and upgrading of quality of services. The policy encourages development of airports by state governments and the private sector, including via PPPs, with greater regulatory certainty. Future greenfield and brownfield airports will have cost-efficient functionality, with no compromise on safety and security. To ensure uniformity and a level playing field across various operators including AAI, future tariffs at all airports in India is proposed on a hybrid till basis, unless otherwise specified. The process is ongoing, and PPP participation will be more dependent on the business cases of individual airports as assessed by the business houses.

A section of the industry avers that no significant investment in airport infrastructure will happen till the 49 per cent cap on ownership of Indian carriers is removed. Do you consider this a valid argument?
It is not considered a valid argument as 49 per cent cap on ownership of Indian carriers and significant investment in airport infrastructure are not directly related. Investment in airport infrastructure is driven by market forces and other social and economic considerations as well.

It is also being said that the country needs mega-airports What is AAI’s assessment?
Airports are without doubt one of the lasting memories a person has of a country or city they visit. Airport operators and governments alike have realised this fact and in recent years many countries have embarked on plans to build the best airports in the world. For many airports it’s all about hitting that elusive 100 million passengers per year figure, for others it may be about having the largest terminal building designed by the most prestigious architect.

In an age of increasing air travel, bigger airports are needed all the time by cities around the world. With the increase in air travel in regions such as Asia, Africa and South America, along with increased competition among airlines servicing strategically important regions of the world, the demand for new destinations and hubs becomes greater.

The constraints brought on by some airports limit the potential of cities and airports. New hub airports around the world need space to grow without impediment, ensuring the economy can remain healthy and vibrant. There are both pros and cons of very big airports. Hub airports will strategically be bigger, but at other cities a big airport will serve a very big catchment area forcing the passengers to travel a long distance. The alternate is a second airport in the city to serve different catchment areas allowing lesser distance to travel by passengers for catching the flights.

Based on the requirements and economic activity, India does boast of mega-airports at Delhi, closely followed by Mumbai. Bengaluru, Chennai, Hyderabad and Kolkata are also capable of the mega-airport tag with suitable expansions, which are taken up based on adequate demand. Second phase of expansion is on at most of these airports.

Going by statistics, the terminal handling capacity of Chhatrapati Shivaji International Airport (Mumbai) is 48 million passengers per annum, and that of Indira Gandhi International Airport (IGIA) is close to 109 million passengers. As per AAI’s traffic forecast, the airports are likely to saturate around 2018 and 2024, respectively. The air passenger traffic demand at Mumbai and Delhi airport by 2031-32 is likely to be around 107 and 211 million passengers per annum. To take care of that government has approved Jewar and Navi Mumbai airports, respectively.

The Indian MRO industry is expected to grow to over $1.5 billion by 2020. However, it is often said that developments in airport infrastructure have not been able to support the growth of the MRO industry. What can be done to rectify the situation?
India, with its growing aircraft fleet size, strategic location advantage, rich pool of engineering expertise, and lower labour costs has huge potential to be a global MRO hub. At present, airlines operating in India get nearly 90 per cent of their MRO done abroad, mainly due to cost advantages resulting from the comparatively high tax burden, cumbersome operating procedures, and the inadequate MRO service facilities available in India. Central government, state governments, and various other agencies imposed taxes and levies on the Indian MRO industry at various points in time without considering the overall impact of these on the development and growth of the industry. The government took note of the situation.

NCAP envisages creation of MRO facilities in all the new airports which will come up. AAI has made provision in the masterplans of all major airports for creation of MRO facilities. Due to logistical issues, MRO facilities are concentrated at a couple of Indian airports at present. Fiscal incentives like tax exemption and subsidy are required from central as well as state governments for MRO operators to set up the facilities as well as for the aircraft using these facilities. This will retain the business within the country as well bring in MRO business from the neighbouring countries as well.

– Manish Pant

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