AAI goes for expansion

After govt stops privatisation move, plans for Chennai & Kolkata airports, beside commercial development at loss-making ones

Government-run Airports Authority of India (AAI) will invest around Rs 1,400 crore in expansion of Chennai airport and in setting up an air traffic control (ATC) tower at Kolkata.

AAI will take up the second phase of the Chennai airport development, earlier planned to be given to a private entity, in a public-private partnership (PPP) deal. It will develop one of the tallest ATC towers (83 metres from ground level) at the Kolkata airport, spending Rs 300-400 crore. Expansion of the other infrastructure might not be taken up for now, sources said.

At Chennai, it plans to integrate the domestic and international terminals. The estimate is at least Rs 1,000 crore for developing the airport, sources said.

Recently, the Union government had scrapped the move to develop four airports at Kolkata, Chennai, Jaipur and Ahmedabad through PPP. The government said AAI had already invested a huge sum at these airports. It has out in Rs 4,500 crore in modernising the airports at Chennai and Kolkata.

On Chennai, an AAI official said: “The (plan) was conceptualised in two phases. However, there are still issues related to integration (of terminals). The second phase was left for the private parties to be developed. However, AAI itself has developed its expertise and can execute this project.”

It has plans to develop the city side of the Lucknow, Raipur and Tirupathi airports, to curtail losses at these. Engineering consultancy firm RITES has been made the project management consultant. The plan is to develop commercial facilities around the airports.

Sources said AAI is exploring more places with “commercial potential” to develop the city side. “Many of the airports are not getting thoroughput to offset their operational losses. This (development) would lead to more revenue flows into AAI and offset the losses we are incurring at many airports,” said an official.

According to the profitability statements of 105 airports managed by AAI, only eight registered profits (before tax) in 2013-14. The profit-making international airports were Chennai, Ahmedabad, Goa, Kolkata, Kozhikode and Thiruvananthapuram. The domestic airports which made profit were at Pune and Juhu.

Experts say the recent moves to scrap privatisation of four airports and not go for listing of AAI on stock markets will impact its revenue. Listing AAI on the stock exchanges would have helped raise money for modernisation. The plan to list AAI was announced in 2009 by the then government.

AAI is also looking to expand to the international market. According to sources, the authority is in process of engaging an agency with expertise in mobilising finances, so that it can work on foreign projects.

“We are trying to have some engagement with agencies, where both of us can work together and try to work outside the country, too. We are discussing with a few partners. We want to participate in foreign projects in Africa, East Asia and Middle East countries,” said the government source.