Hopes Revive: Mopa to propel greenfield airport development

Mopa to propel greenfield airport development

After a significant period of stagnation, the greenfield airport segment is finally witnessing some progress with the Mopa International Airport project in Goa being recently bid out. However, the largest greenfield airport project in terms of investments, Navi Mumbai airport is still stuck due to clearance issues. At the smaller greenfield airports, apart from the Shirdi and Kannur airport projects, development has been limited.

Mopa International Airport project gains momentum

On August 26, 2016, the Mopa project was finally bid out to GMR Airports Limited, on a build-operate-transfer basis. The other four bidders that had submitted the request for proposal were the Airports Authority of India (AAI), GVK Airport Developers Limited, the Essel Infra-Incheon International Airport consortium, and the Voluptas Developers-Vinci Airports consortium.

The concession period for the project is 40 years, with a possible extension of another 20 years through a bid process. As per the contract, GMR will share 36.99 per cent of the airport’s gross revenue with the Goa government. Its competitors, AAI and Essel Infra, had quoted 32.31 per cent and 27 per cent respectively as the government’s revenue share. As per the concession agreement, the revenue sharing model for the project will be hybrid till with a cross-subsidy of 30 per cent. Besides, the concession offers 232 acres of land for commercial cityside development for a period of 60 years.

In March 2000, the Goa government had given in-principle approval for the greenfield airport. At the time it had indicated that the existing Dabolim airport would be closed once operations at Mopa commenced. However, in June 2010, following a review of its decision, the government decided to continue operations at both airports.

The Mopa International Airport, planned in the northern most part of the state adjoining Maharashtra, will be built in four phases and is expected to cost around Rs 31 billion. The airport will have the capacity for handling 4.4 million passengers per annum (mppa) in the first phase, which is expected to be completed within three years, and 13.1 mppa by the end of the fourth phase. It will be developed in the public-private partnership mode, where the government will not hold any stake and its role will be restricted to providing land for the airport. The foundation stone for the project is expected to be laid in September 2016 and commercial operations at the airport are slated to begin by 2020.

With the prime minister himself regularly monitoring progress on the project and ensuring that the timelines for announcing the

successful bidder were adhered to, the government has clearly set an example of how effective governance can lead the way in airport development.

Navi Mumbai airport continues to face delays

Contrary to the momentum gathered by the Mopa International Airport, things do not seem to be moving in the right direction for the Navi Mumbai airport project. In July 2016, the Ministry of Environment, Forest and Climate Change’s Forest Advisory Committee deferred the Stage II forest clearance for the airport, on account of deficiencies in the compensatory afforestation scheme, thus delaying the project further. Besides, the airport is likely to miss its earlier Phase I completion target of December 2019 due to an extension in the period allowed for bids and delays in various clearances. With the Ministry of Home Affairs reversing its earlier decision and providing bid clearance to Hiranandani Developers and its consortium partner Zurich Airport International AG, the City and Industrial Development Corporation will have to extend the request for proposal time frame from October 2016 to January 2017.

Progress on other greenfield projects

As many as 21 greenfield airports entailing a cost of at least Rs 333 billion are at initial stages of development in India.

Apart from the Mopa project, progress has been seen on the Shirdi and Kannur greenfield airport projects as well. Under Phase I of the Kannur International Airport project, the 3,050 metre runway was completed as of May 2016. Besides, about 68 per cent of the work has been completed on the integrated terminal with roofing works in progress. The airport is expected to be fully ready for operations by March 2017.

Shirdi airport is likely to be inaugurated in October 2016, and is awaiting the aerodrome licence from the Directorate General of Civil Aviation.

The Ministry of Civil Aviation (MoCA) has granted approval for the development of the Kothagudem greenfield airport in Telangana. The land acquisition process is currently in progress and is expected to be completed soon. Proposed in August 2007, the airport will be developed by the state government and will be spread over an area of 1,050 acres designated as a reserve forest.

Meanwhile, the Andhra Pradesh Infrastructure and Investment Department is in the process of finalising a loan of Rs 2 billion from Housing and Urban Development Corporation Limited for land acquisition for two no-frills airports proposed at Dagadarthi in Nellore district and Orvakal in Kurnool district.

At present, a number of greenfield airport projects that had been planned at Aranmula, Bellary, Bijapur, Dabra, Gulbarga, Hassan and Shimoga have been stalled. Work on the Bijapur, Shimoga, Gulbarga and Hassan airports had commenced, but was subsequently stopped due to issues with the respective developers.

However, recent developments lend a ray of hope. For the Shimoga and Bijapur airports, the respective state governments are in talks with AAI for project implementation, while for Hassan airport, the state government and AAI are in talks to commence construction work on the land available presently. Bids have been invited for runway extension at Gulbarga airport.

Meanwhile, the MoCA’s demand for a joint feasibility study to be conducted by the state and central governments for the proposed greenfield airport at Jewar, Uttar Pradesh, is likely to further delay the project, the development of which has been in limbo since 2001.

The development of the Aranmula International Airport has also hit a roadblock with the Kerala government withdrawing the in-

principle approval for the project. The state government has already issued a notification to cancel the declaration of the 500 acres of land as an industrial area. The land had earlier been set aside for the airport project. Farming on the land will resume in November 2016.

Concerns about stalled projects

Although the pipeline of 21 greenfield projects looks promising, as a considerable number of projects stand approved, there have been inordinate delays in most of them due to a number of reasons.

Issues pertaining to land acquisition as well as the resettlement and rehabilitation of displaced persons are pressing ones. A case in point is the Chakan airport project which has been pending for over a decade due to land acquisition issues. Similarly, although the development of Sriperumbudur airport forms a part of the Vision 2023 document of the Tamil Nadu government, the project is facing delays due to land acquisition issues and environmental concerns. The resolution of these issues will require firm decision-making and synchronised efforts of the government and private players, if any are involved.

Moreover, issues related to environmental and other statutory clearances have also stretched timelines, which in turn have resulted in cost overruns. This is reflected in the case of Navi Mumbai airport.

Project planning, bidding processes to reduce project delays and an improvement in project bankability are some of the key areas that demand attention. These are crucial in maintaining private player interest in the sector, where their presence is limited. Kushinagar airport is a recent example. Envisaged to be taken up on a public-private partnership basis, the project failed to attract interest from private players. AAI was thus roped in to implement the project in a joint venture with the state government.

Although some key steps such as an online portal for according environmental clearances and the new Land Acquisition Bill for streamlining land acquisition are ones in the right direction, more initiatives to speed up the project development process are urgently required.


It remains to be seen whether the new timelines projected for the various pending works at greenfield airports will be adhered to, amidst all the challenges and concerns. The delays have already led to severe cost overruns, thereby raising questions about the viability of the projects.

However, with Mopa airport, a major greenfield airport in the country, seeing the light of day, the stage is set for a change in perception of various stakeholders with respect to the greenfield mode of airport development. Besides, state governments’ push to encourage airport development and implement the Regional Connectivity Scheme is further expected to speed up the operationalisation of these airports.