The development of greenfield airports has been on the government’s agenda for a long time now. Several experts are of the opinion that the key lies in creating capacity ahead of a surge in demand. While progress has been slow in a few cases due to the huge parcels of land involved, the past two to three years have seen big-ticket projects making significant headway in terms of implementation. Issues have been pinpointed and measures have been initiated to expedite the execution process.
Indian Infrastructure provides an update on key greenfield airport projects…
Navi Mumbai international airport
After a delay of almost 10 years, the Navi Mumbai international airport was finally awarded to GVK Power and Infrastructure Limited in February 2017. The project is estimated to cost Rs 167 billion and will have a passenger handling capacity of 60 million passengers per annum (mppa). In January 2018, Navi Mumbai International Airport Limited (NMIAL), the project’s special purpose vehicle (SPV) and the City and Industrial Development Corporation of Maharashtra signed the concession agreement. Thereafter, in February 2018, the foundation stone for the project was laid. The project was financially closed within six months of its award. In July 2018, NMIAL secured a loan of Rs 103 billion from a consortium of banks with YES Bank as the lead bank. Under the project, two runways and a terminal building will be constructed on 2,268 hectares of land for which expressions of interest from contractors were invited in August 2018. The last date for submission of bids is September 10, 2018. Currently, pre-construction works are in progress and full-fledged construction is expected to commence by end 2018. While works under Phase I are likely to be completed by the end of 2019, the entire project will be completed by 2031.
Jewar airport
After a delay of about a decade, the Jewar greenfield airport project in Greater Noida has finally seen the light of day with the central government’s approval in April 2018. It is the second airport to be developed in the national capital region and will ease pressure off Delhi airport, which is on the verge of reaching saturation. The project will be developed on a public-private partnership (PPP) basis with an investment of around Rs 150 billion-Rs 200 billion. The Yamuna Expressway Industrial Development Authority (YEIDA), the implementing agency for the project, has notified a total of 3,000 hectares of land for its development. Four runways are planned to be developed under the project in a phased manner with Phase I estimated to cost Rs 100 billion. Currently, the Uttar Pradesh government and YEIDA are in the process of acquiring land for the project, and this has been the biggest hurdle in its implementation. According to plans, the foundation stone is likely to be laid by October 2018, after which bids for selecting the developer will be invited. Construction work on the project is expected to commence by April 2019 with completion expected by 2023. Once completed, the airport will cater to 30-50 mppa over the next 10 to 15 years.
Mopa airport, Goa
The Goa government had been planning a second airport at Mopa for a very long time. Though the project received in-principle approval from the central government in March 2000, it got mired in land acquisition and local litigation issues. After a long delay, in October 2014, the state government invited bids for developing the airport worth Rs 45 billion on a PPP basis. Thereafter, in August 2016, GMR Airport Limited was selected as the concessionaire with a concession period of 40 years (extendable to 60 years). The SPV for the project, GMR Goa International Airport Limited, will develop the airport in phases with Phase I estimated to cost Rs 19 billion. It will be funded on a debt-equity ratio of 70:30 for which a loan amount of Rs 13.3 billion has been tied from Axis Bank. In February 2018, a Philippines-based firm, Megawide Construction Company, was awarded the contract to develop the project. While the pre-construction activities commenced in April 2017, the actual work of constructing a runway, airport terminal and an air traffic control tower will commence post the stone-laying ceremony that is expected to take place in October 2018. Phase I is expected to be commissioned by September 2020 and will handle 4.4 mppa. Once completed, the entire project will be able to cater to 30 mppa.
Bhogapuram airport
The central government approved the development of the Bhogapuram greenfield international airport worth Rs 22.61 billion in Visakhapatnam in October 2016. Soon after, the implementing agency, Andhra Pradesh Airports Development Corporation Limited, invited bids for its development and the Airports Authority of India (AAI) emerged as the lowest bidder. However, the project could not progress as the bids were cancelled on grounds that it would be developed as an integrated airport with an aviation university, maintenance repair and overhaul facility, airport city and other related infrastructure. Following this, bids were reissued in July 2018 and a response from 13 companies was received. Some of these are Ramky Infrastructure Limited, the Essel Group, the GVK Group, and the GMR Group. As of now, the contract is yet to be awarded, as the last date for the submission of request for quotation bids was September 14, 2018.
Dholera airport
The Dholera international airport in Gujarat is another greenfield project that had been languishing during the past decade. Estimated to cost Rs 21.25 billion, the project saw progress only in the past couple of years. All requisite approvals have now been obtained and in July 2018, AAI agreed to be an equity partner in the project with a 51 per cent share. The remaining 49 per cent will be held by the Gujarat government. About 1,423 hectares of land has been earmarked for the development of two runways under the project and work will be taken up in three phases. To speed up its implementation, the central government has given its consent to part-finance the project. Construction work is yet to commence as the foundation stone is expected to be laid by end 2018.
Other airports
Some of the other airports to be developed in the country are the New Pune (Purandar) international greenfield airport and Rajkot greenfield airport (Hirasar). Work is yet to start on the airports. For Purandar airport, the MoCA granted site clearance for its development in May 2018. With this, Maharashtra Airport Development Company Limited, the nodal agency for the project, can now proceed with the preparation of the techno-economic feasibility report and detailed project report. The project is expected to be developed in a phased manner at an estimated cost Rs 120 billion-Rs 150 billion with work on Phase I expected to be completed by 2024-25. Meanwhile for Rajkot airport, worth Rs 14 billion, Reliance Infrastructure Limited emerged as the lowest bidder (in August 2018) for developing the project.
So far, work on several greenfield airports has been completed. For instance, construction work on the Kannur international airport in Kerala worth Rs 18.92 billion has been completed and commercial operations are expected to commence by October 1, 2018. Pakyong airport in Sikkim is another greenfield airport that has been completed at a cost of Rs 6.5 billion.
IRB Infrastructure Developers Limited, the concessionaire for Sidhudurg airport in Maharashtra, is expected to complete construction work on the airport soon. Trial runs for flight operations have commenced and the airport is expected to be operationalised by October 18, 2018.
The government recently inaugurated a new airport in Jharsuguda on September 23, 2018, which will provide necessary connectivity to Bhubaneswar, Raipur and Ranchi.
Future outlook
Once commissioned, the greenfield airports will create sufficient capacity to meet increases in demand in the medium to long term. However, issues related to clearances, land acquisition, lack of clear policies and adequate funding have to be tackled in a systematic manner to ensure the smooth completion of projects. In this regard, the government’s recent initiative – NextGen Airports for Bharat Nirman – is a step in the right direction. The key aspects of the initiative including fair and equitable land acquisition, a long-term master plan for airports along with regional development and balanced economics for all stakeholders augur well for airport capacity augmentation in the country.