The Hindu Business Line : Airport restructuring — Obstacles to a smooth take-off

In the Delhi and Mumbai airport modernisation, the crucial issue is the lack of adequate runway facilities. This cramps quick turnaround of aircraft and the problem is aggravated by the absence of parking bays. The runway issue is also beginning to hit new foreign carriers wanting to fly into India. The immediate focus should thus be on building runways and parking bays. The terminals can come later, says R. Krishnan.

On the road to solving the runway problem?

AT LAST, the process of modernising Delhi and Mumbai airports has been set in motion with the empowered Group of Ministers approving the nine bidders who responded to the expression of interest floated by the Ministry of Civil Aviation in early 2004.

The Airports Authority of India (AAI) has notified the bidders. And the Request for Proposal (RFP) will be circulated once the project's Global Technical Advisor, "Air Plan" of Australia, draws up the technical parameters for incorporation in the RFP which is expected to be out by January.

Final bids — both technical and financial — could be ready for opening by mid-2005. But there can be many a slip between the government's intention and the actual execution of the modernisation project. Already, there has been a delay of six months and this could get extended once the experience of some foreign joint venture partners come up for review.

Even as the modernisation process has begun on paper, the Ministry has also decided to upgrade the Chennai airport on the lines of Delhi and Mumbai and build five more greenfield airports at Goa, Navi Mumbai, Pune, Kanpur and Nagpur, which could be designated new international hubs.

As per current estimates, the six airports may cost Rs 6,000 crore provided there are no time and cost over-runs. The same could also happen with Delhi and Mumbai projects. But pending restructuring of Delhi and Mumbai airports, it is necessary to take immediate steps to upgrade the air-side infrastructure at these two airports to facilitate entry of new players in the domestic skies.

With the government opting for private participation to modernise airports, the least one expected was that past mistakes would be avoided. Issues which hindered airport development should have been ironed out. But no rectification has been made or else a conscious decision would have been taken to consolidate activities such as runways, parking bays, ATCs, and so on, under the exclusive air-side, leaving other activities including terminal buildings on the city-side.

No passenger/user has complained about the quality of runways or lack of parking bays. Their grievance mainly related to the quality of terminal buildings and the lack of ground facilities on the city-side besides the equipment required to ensure smooth traffic during fog.

The runway is the basic issue at the Delhi and Mumbai airports. Mumbai handled an average of 400 flights a day in 2003-04, of which 22,000 were domestic and 15,000 international passengers. Delhi accounted for 330 flights (both landing and take-off), with 17,000 domestic passengers and 12,000 international.

The domestic passenger numbers have been rising rapidly and this has enticed new airlines to the Indian skies. The problem starts here and needs to be tackled quickly if the government seeks to avoid being blamed as a spoiler or playing favourite.

Mumbai runway handles 25 flights an hour during the busy hours from 5 a.m. to 10 p.m. The peak hour slots are from 6 a.m. to 10 a.m. and 4 p.m. to 9 p.m. Between 10 a.m. and 4 p.m., there are few flights on the metro sector which yield maximum revenue per passenger. Again, from 10 pm to 5 am, Delhi and Mumbai airports handle around 17 aircraft movement per hour respectively. The cramping of runways will limit quick turnaround of aircraft and the absence of parking bay availability will aggravate the problem.

Thus, where will new domestic, including the low-cost, carriers go. Cramped runways and absence of parking bays will finish their business even before they start and the travelling public would continue to be shortchanged by restricted competition.

The runway problem is already beginning to hit new foreign carriers wanting to fly into India as the AAI is finding it extremely difficult to allot slots at peak hours forcing them to take off from their home stations at odd times or alternatively land in Delhi or Mumbai at unearthly hours.

This is notwithstanding an advantage India has in offering multiple destinations unlike the UK, France, Germany or South-East Asia, which are single destination-oriented for Indians flying out of various Indian cities.

The Government allowing complete open skies for foreign carriers from November 1, 2004 to March 31, 2005 is already crimping infrastructure.

In the 2004-05 open-sky season, India will receive 1,700 additional international services, while the infrastructure, mainly runways, will be the same. About 65 per cent of the new services will be provided by Gulf and South-East Asian carriers and, thankfully, they are not asking for night-halt parking.

What is stated above seems appropriate for international flights. But similar problems also confront domestic operators, besides the parking bay space availability.

The Government should focus on this urgently; otherwise all talk of attracting foreign direct investment (FDI) into the domestic airline business will be like a flight to nowhere.

The failure to resolve the situation or blaming it on bureaucracy will only compromise Dr Manmohan Singh's Government with crony capitalists who will use the occasion to perpetuate their monopoly at the cost of competition and public interest.

If the AAI builds new runways at Delhi and Mumbai and constructs slip-ways off existing runways, it will substantially enhance their capacity to handle many more flights, both domestic and international.

This takes us to the next most important factor that is constraining domestic aviation business and acting as entry barrier.

The availability of parking bays for night-halt at airports in Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore has become a limiting factor. At Delhi's Indira Gandhi International Airport, all 34 parking bays are fully allotted, so also the 41 in Mumbai, the 21 in Chennai and the 16 at Kolkata.

But the Ministry has asked the AAI to build additional parking bays — seven each in Delhi and Mumbai besides three each in Chennai and Kolkata. Even this comes after the Civil Aviation Minister, Mr Praful Patel, took personal charge of the situation. But there is scope for building 40 more parking bays in Delhi, 10 more in Mumbai and scores more in Chennai.

Except for Mumbai, where land is the limiting factor that can be overcome only if the shanties are removed from airport land in the vicinity, there is no land problem in Delhi and Chennai.

What is required is political courage to prevent entrenched players from pre-empting parking bay space, like industrial houses in India used to do during the days of licence-quota-permit raj. Can one imagine what will happen to India's image if Delhi's modernised and restructured airport with new terminals fails to come up at least a year before Commonwealth Games are ready for inauguration in the capital?

One may argue that since the airport modernisation process is on, let new players wait. But is not the availability of runways (Airbus A 380-compliant) and parking bays of immediate concern? Why not start building it? The terminals can come up soon after.

Runways and parking bays do not require any special design, while terminals need aesthetic and best space use approach and can be dovetailed to the former. Using the modernisation argument will only perpetuate the monopoly of the entrenched.

The AAI completed a feasibility study for new terminal building at the IGI Delhi airport in January 1996 at an estimated cost of Rs 715 crore. Building a new runway would have cost a few hundred crore rupees more. The AAI being a zero-debt company could have easily raised Rs 10,000 crore through borrowing. The feasibility plan was made to pass through all government corridors, including the Ministry of Environment and Forests.

On official instructions, the AAI even got the required information from Singapore, Bangkok, Kuala Lumpur and Hong Kong airport authorities. But the Government changed at the Centre and another review of the feasibility was done in April 1998. Meanwhile, the terminal cost estimate rose. After more bureaucratic obstacles, the AAI submitted an updated feasibility report at 1999 prices (new cost Rs 874 crore) accompanied by a draft Public Investment Board memorandum.

This time, the Environment Ministry raised new queries before clearing it in February 2002. When it came up for pre-PIB, the NDA Government dropped it as it had decided to restructure Delhi and Mumbai airport. This process itself went through twists and turns ranging from BOO to BOLT. In fact, the AAI had even invited global architecture design. Even this was abandoned. It was only in December 2003 that the Vajpayee Government decided to restructure the Delhi and Mumbai airports with domestic private and foreign equity participation.

Significantly, the Ministry of Civil Aviation had in 2002 directed AAI not to undertake any capital expenditure of more than Rs 10 crore without its approval. All you could modernise with Rs 10 crore was toilets and washrooms at metro airports. The status quo has not changed till this date.

The story of building a new terminal at Mumbai's domestic airport was even stranger. After initiation in December 1993, it was also abandoned in December 2002, heeding the privatisation argument.

While new terminals could wait to be built, why should runways and parking bays be on a compulsory wait?

(The author is a Delhi-based freelance writer.)

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