Indian skies set for new highs
Indian sky is expected to be one of the hottest spots for investors as the country is expecting over $150-billion investment in the sector by 2020.
By Nirbhay Kumar, TNN |
| Ashok Chawla |
Indian sky is expected to be one of the hottest spots for investors as the country is expecting over $150-billion investment in the sector by 2020. By then, the government’s vision is to take passenger traffic to 280 million with a CAGR of 12%. The cargo traffic is slated to touch 9 million tonnes at a CAGR of 14%. The greatest challenge is to create the necessary infrastructure to sustain the growth. Civil aviation secretary Ashok Chawla reflects on some key issues related to growth. Excerpts:
The aviation landscape in the country is heading towards a major makeover, having a combined domestic and passenger traffic of about 280 million by 2020. Is there any strategy for developing related infrastructure to sustain the growth?
The sector is growing very fast. There has been some pressure on the existing airport infrastructure. We have already geared up to meet the long-term infrastructure need. Modernisation of metro airports, such as Delhi and Mumbai through JV route, is part of the initiative taken by the government to provide world-class facilities. About $40 billion would be invested on the development of greenfield airports, modernisation of existing airports and upgradation of communication, navigation and surveillance systems. AAI would invest close to 40% of the investment in infrastructure during this period. Balance investments would come from the private sector.
What are the investment projections for the sector?
Passenger traffic is expected to grow at a compound annual growth rate (CAGR) of 12% to 280 million till 2020 from 96.4 million now. During this period, cargo traffic would move at a CAGR of 14% per annum to 9 million tonnes. Based on this, the sector would require about $150-billion investment by 2020. Majority of the investment would be meant for aircraft acquisition, both by the public and the private sector. Airlines are expected to spend $110 billion for fleet acquisition.
The government has already charted out plans for the modernisation of 35 non-metro airports under the public-private-participation (PPP) model. What is the current status?
As planned earlier, the modernisation work of all the 35 non-metro airports would be completed on PPP basis by 2010. While air-side development work at 24 airports have already been awarded, the remaining are in the process of being awarded. Works at some airports are nearing completion. As far as city-side developments of all these airports are concerned, we would soon start inviting bids from private developers in phases. To begin with, we would soon invite expression of interest for Udaipur and Amritsar airports.
There was a plan for simultaneous city-side development. It has been noticed that, in certain cases, city-side development is delayed.
Due to certain policy issues it did take some time. Ascertaining economic viability is also important. The extent of AAI’s involvement is being determined before starting city-side works at these airports. Some agreements have been reached on these issues among various arms of the government, including the Planning Commission and the finance ministry. It is estimated that about Rs 41,000 crore would be required for modernising the 35 non-metro airports in the next four-five years. We have got feasibility reports from consultants for 24 non-metro airports where developing commercial infrastructure is possible. Request-for-quotation document are currently being formulated for all non-metro airports.
What about modernisation of metro airports? Are you satisfied with the progress in Mumbai and Delhi?
Two months back we reviewed the modernisation works in Delhi and Mumbai airports. The GMR Group-led Delhi International Airport Ltd (DIAL) and the GVK-led Mumbai International Airport Ltd (MIAL) are undertaking the job. Progress are on the expected lines and more or less all deadlines are adhered to. While the third runway at Delhi airport would be operational by July next year, MIAL has also started work on building an integrated terminal at Mumbai airport.
But MIAL revised its master plan in May this year. Will it delay the project?
As per operation, maintenance and development agreement, the ministry has sent its comments to MIAL through AAI. By and large, we have accepted their revised master plan. For example, they have proposed to have an integrated terminal at the airport for domestic and international passengers, and we have agreed to that. They have already started working on the revised master plan, and it is likely that the project would be completed as per the schedule.
The aviation landscape in the country is heading towards a major makeover, having a combined domestic and passenger traffic of about 280 million by 2020. Is there any strategy for developing related infrastructure to sustain the growth?
The sector is growing very fast. There has been some pressure on the existing airport infrastructure. We have already geared up to meet the long-term infrastructure need. Modernisation of metro airports, such as Delhi and Mumbai through JV route, is part of the initiative taken by the government to provide world-class facilities. About $40 billion would be invested on the development of greenfield airports, modernisation of existing airports and upgradation of communication, navigation and surveillance systems. AAI would invest close to 40% of the investment in infrastructure during this period. Balance investments would come from the private sector.
What are the investment projections for the sector?
Passenger traffic is expected to grow at a compound annual growth rate (CAGR) of 12% to 280 million till 2020 from 96.4 million now. During this period, cargo traffic would move at a CAGR of 14% per annum to 9 million tonnes. Based on this, the sector would require about $150-billion investment by 2020. Majority of the investment would be meant for aircraft acquisition, both by the public and the private sector. Airlines are expected to spend $110 billion for fleet acquisition.
The government has already charted out plans for the modernisation of 35 non-metro airports under the public-private-participation (PPP) model. What is the current status?
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As planned earlier, the modernisation work of all the 35 non-metro airports would be completed on PPP basis by 2010. While air-side development work at 24 airports have already been awarded, the remaining are in the process of being awarded. Works at some airports are nearing completion. As far as city-side developments of all these airports are concerned, we would soon start inviting bids from private developers in phases. To begin with, we would soon invite expression of interest for Udaipur and Amritsar airports.
There was a plan for simultaneous city-side development. It has been noticed that, in certain cases, city-side development is delayed.
Due to certain policy issues it did take some time. Ascertaining economic viability is also important. The extent of AAI’s involvement is being determined before starting city-side works at these airports. Some agreements have been reached on these issues among various arms of the government, including the Planning Commission and the finance ministry. It is estimated that about Rs 41,000 crore would be required for modernising the 35 non-metro airports in the next four-five years. We have got feasibility reports from consultants for 24 non-metro airports where developing commercial infrastructure is possible. Request-for-quotation document are currently being formulated for all non-metro airports.
What about modernisation of metro airports? Are you satisfied with the progress in Mumbai and Delhi?
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Two months back we reviewed the modernisation works in Delhi and Mumbai airports. The GMR Group-led Delhi International Airport Ltd (DIAL) and the GVK-led Mumbai International Airport Ltd (MIAL) are undertaking the job. Progress are on the expected lines and more or less all deadlines are adhered to. While the third runway at Delhi airport would be operational by July next year, MIAL has also started work on building an integrated terminal at Mumbai airport.
But MIAL revised its master plan in May this year. Will it delay the project?
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As per operation, maintenance and development agreement, the ministry has sent its comments to MIAL through AAI. By and large, we have accepted their revised master plan. For example, they have proposed to have an integrated terminal at the airport for domestic and international passengers, and we have agreed to that. They have already started working on the revised master plan, and it is likely that the project would be completed as per the schedule.
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