Hurdles cleared for 2nd Mumbai airport

Hurdles cleared for 2nd Mumbai airport

After eight years of uncertainty and a tripling of construction costs, India's commercial hub and largest city Mumbai will now get a second airport to cater to the country's burgeoning air traffic.

The project, delayed by land disputes, cleared its last remaining major hurdle when local authorities signed a landmark deal on Nov11 with villagers who will be displaced by the airport.

The 5,000 affected families in seven villages and the Maharashtra state government had wrangled for years over compensation.

The deal comes not a moment too soon as the current Chhatrapati Shivaji International Airport is bursting at the seams, handling 30 million passengers, beyond its capacity, leading to chronic delays.

October figures show that 18 per cent of arriving flights and 17 per cent of departures were delayed by more than 15 minutes.

The new airport is to be located across the harbour from Mumbai at Panvel, on 2,262ha of farmland that is flanked by a river, marshes and hillocks.

It will be in Navi Mumbai, a satellite town of Mumbai proper, and 40km from the current airport, which is inside Mumbai.

It is estimated to cost 150 billion rupees (S$3billion), three times the original 2005 cost estimate of 50 billion rupees.

The airport is to be built through a public-private partnership. At the end of next month, the state's planning agency, the City and Industrial Development Corporation (CIDCO), will place advertisements globally, seeking Request for Qualification (RFQ) proposals from developers willing to construct the airport and operate it for 30 years with a 74per cent stake. The remaining 26per cent will be held equally by the state and central governments.

"We want to award the construction contract within 10 months (of the RFQ document)", said a CIDCO spokesman.

CIDCO says the airport will be operational by mid-2017 and will initially handle 10 million passengers a year, increasing to 60 million passengers a year by 2030 when it is fully completed.

Mumbai, the capital of Maharashtra and home to 17 million people, will become the first Indian city to have two fully functional airports.

It is hoped that the new airport will help Mumbai regain its position as India's busiest air travel hub. Delhi overtook Mumbai in 2011 thanks to the new Terminal3 of the Indira Gandhi International Airport which handled 34.37 million passengers in the year to March against Mumbai's 30.21 million.

Mumbai's present airport is undergoing a 125 billion rupee major upgrade by the private GVK Group, expected to be completed next month, to enable it to handle 40 million passengers a year.

But the upgrade may do little to improve delays at the airport as there is still just one operational runway.

Also, the scope for expansion of the airport is limited as it is located in the heart of the city and surrounded by some 400,000 slum dwellers.

"Mumbai certainly needs another airport as the existing airport will be saturated within the next four or five years," said Mr Arun Arora of GVK.

But travellers are already warning that the new airport needs to have good connectivity to Mumbai if it is to succeed.

"Currently, it takes about two hours to reach Panvel (from Mumbai)," said frequent flier and pharmaceuticals professional Tapan Ray. "Given the present (poor) connectivity, most people would miss flights (if the airport were now at Panvel)," he said.

Mindful of this, CIDCO has said the new airport will be connected by road, rail and water transport to Mumbai.

"There will be a new road link across the harbour (to Panvel)," said a CIDCO spokesman.

Mumbai's new airport is possibly a harbinger of more regional airports to come, with air traffic nationwide growing at 14 per cent annually.

Mr Amber Dubey, partner and head, aerospace and defence, at global consultancy KPMG sees a "strong long-term outlook" for India's aviation sector.

"India is the world's third-largest economy, with a 400-million-strong middle class and blessed with huge tourism potential in terms of history, culture, religious and natural attractions," he said.

Yet, nearly 99.5 per cent of 1.2 billion Indians do not fly, and foreign tourist arrivals last year were 6.3 million compared with, say, China's 58 million, he added.

Mr Dubey sees hope in a slew of industry-friendly reforms and government support for the setting up of regional airports.

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