AAI to Invest in Expansion of Chennai Airport

AAI would invest up to Rs 1,400 cr on Chennai Airport expansion a move which comes after govt dropped privatisation plans.

Published: 23rd September 2015 06:02 PM  |   Last Updated: 23rd September 2015 06:02 PM   |  A+A-


NEW DELHI: State-run Airports Authority of India (AAI) would invest up to Rs 1,400 crore in further expansion of Chennai Airport and setting up an ATC tower at Kolkata Airport, a move which comes after the government dropped its privatisation plans.

Besides, the national airport operator plans to develop city side of Lucknow, Raipur and Tirupati airports to shore up additional revenue and curtail operational losses of these airports, a senior AAI official said today.

"We are integrating domestic and international terminals at Chennai airport for facilitating passengers an easy access as part of the second phase of its expansion plans. We are in the process of appointing a project management consultant for this purpose. The entire (integration) work will require an investment of around Rs 1,000 crore," the official said.

The AAI has also drawn up a plan to set up a new ATC (Air Traffic Tower) at Kolkata airport at an investment of Rs 300-400 crore, the official said, adding, "These two projects would be funded through internal accruals as well as by raising debt from the market."

The Government had earlier planned to handover Jaipur and Ahemdabad airports along with these two metro airports to private players for their development, management and operations after investing Rs 5,000 crore public money in their modernisation and upgradation.

However, it had to drop the move due to vehement opposition from AAI unions and global airlines grouping, International Air Transport Association (IATA) expressing reservations over it on the grounds that the present model of airports privatisation had only resulted in high costs for the fliers.

"My suggestion is that the government should carry out a rigorous cost-benefit analysis before taking a decision on these four Airports Authority-run airports...Whatever be the decision, it should not lead to repeat of what has happened in Delhi, Mumbai and Bangalore where airport user fees have shot over roof," IATA director General and Chief Executive Tony Tyler had said recently while opposing outright privatisation of these four airports.

Significantly, nine private firms including Tatas, Adani GMR, GVK and Essel groups had shown interest in these four airports after the government floated RFQ late last year.

Travelling from Delhi, Hyderabad, Mumbai and Bengaluru airports has become expensive ever since the airports have gone to private players - namely GMR and GVK groups.

The official said AAI has appointed engineering consultancy firm RITES as Project Management Consultant for the city side development of Lucknow, Raipur and Tirupati airports as it would help these airports earn additional revenue and minimize their operational losses.

The city-side constitutes commercial facilities around the airport for the benefit of passengers like development of property on the airports' land, building and maintaining car parking and cargo operations among others.

"Many of the airports are not getting thorough output to offset their operational losses. The development of hotels, restaurants, parking spaces and aviation companies offices around them would strengthen their topline," the official said.

AAI, which manages some 125 airports in different parts of the country, has reported a net profit of Rs 1,959 crore in the previous fiscal (FY15) as against Rs 1,441 crore reported in FY14.

Its revenue during the period also rose by 13.67 percent to Rs 9,285 crore as compared to Rs 8,170 crores in the fiscal year ended March 31, 2014.

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