The central government has taken several initiatives towards greenfield airport infrastructure development. The past two to three years have seen big-ticket greenfield projects making significant headway. However, despite the tremendous progress seen in terms of development of such airports, a number of issues pertaining to complex administrative procedures and costly land acquisition still need to be addressed.
Indian Infrastructure provides an update on key upcoming and ongoing 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 October 2017. The project is proposed to be implemented in four phases at an estimated cost of Rs 163 billion and a passenger handling capacity of 60 million passengers per annum (mppa). In January 2018, Navi Mumbai International Airport Private Limited (NMIAPL), the project’s special purpose vehicle (SPV), and the City and Industrial Development Corporation of Maharashtra (CIDCO) signed the concession agreement. The foundation stone for the project was laid in February 2018. Phase I of the project missed the previous deadlines of December 2019 and May 2020, and is now expected to be completed by May 2021. The entire project is expected to be completed by 2030.
Under the project, two runways and a terminal building will be constructed on 2,268 hectares of land. L&T Construction won the engineering, procurement and construction (EPC) contract for the project in August 2019. In August 2020, Adani Airport Holdings Limited (AAHL) entered into an agreement to acquire the debt of GVK Airports Developers Limited, which holds 50.5 per cent equity stake in Mumbai International Airport Limited (MIAL), which in turn holds 74 per cent equity stake in NMIAPL. The balance 26 per cent stake in NMIAPL is held by CIDCO. The Adani Group will also take steps to complete the acquisition of a 23.5 per cent equity stake from Airport Company South Africa and Bidvest in MIAL, for which it has obtained Competition Commission of India (CCI) approval.
Jewar airport
On October 7, 2020, Noida International Airport Limited (NIAL) and Yamuna International Airport Private Limited, an SPV floated by Zurich Airport International AG, signed the concession agreement for the Jewar airport project in Noida, Uttar Pradesh. Construction work on the project is likely to commence by early 2021. The project achieved financial closure in November 2020, with Rs 5 billion in funding assistance from HDFC Bank. Meanwhile, the Housing and Urban Development Corporation has also provided financial assistance to the project. It is estimated to cost over Rs 295 billion and the promoters are looking to raise additional funds through the issuance of infrastructure bonds soon.
The Ministry of Civil Aviation (MoCA) had granted approval to the project in May 2018, after which the Yamuna Expressway Industrial Development Authority signed an MoU with the Uttar Pradesh government, the Noida Authority and the Greater Noida Industrial Development Authority for setting up NIAL, the JV for the project. The project has been included among the world’s 100 strategic global infrastructure projects for the year 2020. The airport is proposed to be developed on a public-private partnership (PPP) basis with a concession period of 40 years. Expected to be spread over 5,000 hectares, the plan is to initially build a two-runway airport and eventually extend it to a 7,200 acre six-runway airport. Currently, land acquisition has been completed for Phase I of the project that is expected to commence operations by 2024. In February 2020, the Uttar Pradesh government allocated funds worth Rs 20 billion for the project under its 2020-21 budget. In March 2020, the project received environmental clearance for developing Phases I and II of the project.
Mopa airport, Goa
The Goa government had been planning a second airport at Mopa for decades. Though the project received in-principle approval from the central government in March 2000, it was mired in land acquisition and local litigation issues. In August 2016, GMR Airports Limited was selected as the build-operate-transfer 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 four phases with Phase I estimated to cost Rs 19 billion. The entire project is estimated to cost Rs 33 billion and will be funded entirely by the private developer. In February 2020, the CCI approved Aéroports de Paris SA’s acquisition of a 49 per cent equity stake in GMR Airports Limited and a 100 per cent equity stake of GMR Infra Services Limited for a transaction value of Rs 107.8 billion.
The phased development will involve expansion of the terminal, commercial and cargo aprons, taxiways and aviation facilities, along with the construction of a six-lane expressway linking the airport to National Highway-17. The airport will be able to handle 13.1 mppa upon completion of the fourth and final phase by 2045. GMR has awarded the EPC contract to develop the project to a Philippines-based firm, Megawide Construction Company. In March 2020, the Ministry of Environment, Forest and Climate Change granted environmental approval, after the Supreme Court removed the suspension of environmental clearance for the project in January 2020. The state government and GMR have agreed to reduce the runway length from 3.75 km to 3.5 km. The project is targeted for completion by 2022.
Bhogapuram airport
In April 2020, the Andhra Pradesh government issued the letter of award to GMR Airports Limited for implementation of the Bhogapuram airport project following which GMR Visakhapatnam International Airport Limited, the project SPV, signed the concession agreement for project implementation in June 2020. The operation and maintenance (O&M) period for the project is 40 years, extendable by another 20 years through a competitive bidding process. The state government has allocated funds worth Rs 510 million for the project under the 2020-21 state budget. Meanwhile, the state government has decided to reduce the proposed airport area to 2,200 acres from 2,700 acres, as the government will take 500 acres of land for commercial purposes.
Dholera airport
The Dholera international airport in Gujarat is another greenfield project that had been languishing since it received approval from the Ministry of Civil Aviation in January 2016. The project is being implemented in a phased manner by Dholera International Airport Company Limited (DIACL), an SPV formed by the Gujarat government, at an estimated investment of Rs 21.25 billion. The airport will be developed on 1,700 acres of land, and Phase I of the project is expected to be operationalised by 2024. In November 2018, the Airports Authority of India (AAI) acquired a 51 per cent stake in DIACL, with the Gujarat government holding 33 per cent and the National Industrial Corridor Development and Implementation Trust holding the remaining 16 per cent stake. AAI signed an MoU for project development with the Gujarat government in January 2019.
New Pune (Purandar) international airport
Work on the proposed international greenfield airport in Pune is all set to begin with the Maharashtra government urging the Pune district administration to expedite the land acquisition process. A total of 2,832 hectares of land needs to be acquired for the project.
The airport is proposed to be developed as a full-fledged international airport with Code-F standards over a period of 30 years. The project is being implemented by Maharashtra Airport Development Company [MADC] Limited at an estimated cost of over Rs 100 billion. The Maharashtra government accorded administrative and financial approvals to the project in May 2018, following which the state cabinet approved the formation of an SPV in March 2019. CIDCO will hold a 51 per cent stake in the SPV, while MADC’s stake will be 19 per cent. The remaining 30 per cent will be divided between the Maharashtra Industrial Development Corporation and the Pune Metropolitan Region Development Authority. In February 2020, the state government released funds worth Rs 450 million for the project.
Other key upcoming airports
The other key upcoming airports include the Hirasar, Kushinagar and Sriperumbudur airports.
Hirasar (Rajkot) airport is being implemented by AAI. The Gujarat government signed an MoU with the authority for the development of the project in January 2019. In February 2020, Dilip Buildcon Limited was awarded a contract worth Rs 5.7 billion for detailed designing and EPC works for the project, after termination of the contract with Reliance Infrastructure Limited. Besides, AAI has signed an MoU with the Uttar Pradesh government to take over the development and operations of the upcoming Kushinagar airport. In June 2020, the central government approved the proposal to declare the airport as an international airport. The foundation stone for the project was laid in August 2020.
The central government has also included the upcoming Sriperumbudur airport as part of the National Infrastructure Pipeline. The Rs 150 billion project is expected to start in March 2021 and be completed by April 2023. Besides these projects, a number of greenfield airport projects have been proposed in cities/districts such as Hassan, Bijapur and Shimoga in Karnataka, Deogarh in Jharkhand, Dabra in Madhya Pradesh, Karaikal in Puducherry and Hollongi in Arunachal Pradesh. Meanwhile, the Andhra Pradesh government has recently terminated the PPP concession agreement with SCL-Turbo Consortium Private Limited for the Dagadarthi airport project, owing to delays in financial closure.
To ease the increasing burden on existing airports, the government needs to focus on upscaling capacity through the development of more greenfield airports. To achieve this, the processes related to obtaining approvals and clearances and acquiring land that have slowed down project execution for greenfield airports need to be fast-tracked. Especially during the ongoing Covid-19 pandemic, when private developers are facing funding issues, financial incentives too will play an important role in ensuring greenfield project development.