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New Jaipur airport overcomes 150-km rule

Ranju Sarkar  |  New Delhi 

A proposed airport near Jaipur could become the country’s first to come up within 150 km of an existing airport, and overcomes the government’s stated policy of not allowing more airports within 150 km of an existing airport.

The government has accorded ‘in-principle’ approval to Rajasthan Aviation Infrastructure (India) for setting up a greenfield airport at Viratnagar, Minister said in Parliament on March 12. The company received an in-principle approval from the government on February 15.

A steering committee, comprising representatives from the ministries of civil aviation, defence, home affairs, economic affairs and revenue, as well as those from the meteorological department, Airports Authority of India, directorate general of civil aviation, and the state governments, had approved the airport on May 28, 2009, after it got necessary approvals.

The government, in its greenfield airports policy unveiled in 2008, had said if an airport was proposed within 150 km of an existing facility, such cases would be examined on a case-to-case basis and the same would be considered by the steering committee.

The proposed airport is to come up at Viratnagar, 63 km from Jaipur and 167 km from the Delhi airport. It got the approval as the existing airport is constrained to expand, and is likely to be saturated by 2013-14. This is despite a new terminal it added recently.

The existing Jaipur airport is one of the fastest-growing in the country, and has recorded almost five-fold growth in passenger traffic in the last five years. It has no taxiways and can’t take twin-aisle, wide-bodied aircraft that many international airlines use. The airport is flanked by National Highway 24 on one side and residential colonies on the other.

“It’s a blessing in disguise for Jaipur. The new airport will not be competing with the existing one but will complement it,” said Nikhil Gupta, a Jaipur-based businessman and joint MD, Rajasthan Aviation, and one of its two original promoters.

Luckily, the new airport will be beyond 150 km of the Delhi airport, and India is at the centre of the traffic between Europe and East Asia, said Yogesh Garg, CEO, Rajasthan Aviation, who is the second promoter.

Over 560 planes fly past India, said Gupta.

The new airport will use its location to position itself as a multi-modal logistics hub with a key focus on cargo. The airport (to come up at a site near Sahapura, on the Delhi-Jaipur highway) will be flanked by the dedicated freight corridor (DFC) the one side and the National Highway 8 on the other. will provide the port connectivity.

The airport also plans to leverage its location on the Delhi-Mumbai Industrial Corridor (DMIC), which will be developed as a model industrial corridor within a band of 150-200 km of the western dedicated freight corridor. The airport plans to request Indian Railways to build a 10-km railway siding that would connect it to the freight corridor.

Three industrial zones fall within DMIC: Manesar-Bawal, Khushkhera-Neemrana-Behror and Jaipur-Tausa. “Ìt would be a multi-modal logistics hub, where cargo could move seamlessly by rail, road, and air,” said Gupta. The would connect to ports in Gujarat and Jawaharlal Nehru Port (Nhava Sheva) in Navi Mumbai.

Rajasthan Aviation also plans to develop an aerotropolis around the airport that will house aviation-based units like aircraft manufacturing line, maintenance repair and overhaul (MROs) units, defence manufacturing units under offset clauses, time-sensitive industries like perishables and city-side developments like hotels and retail.

“In India, the airports are more like railway stations but globally airports are becoming an eco-system in themselves,’’ said Gupta. Al Maktoum International Airport, which is being developed in Jebel Ali, Dubai, is spread across 140 sq km. An airport city would be developed around the airport, much like the Hahn airport in Germany.

The new Jaipur airport could also be India’s first no-frills airport that could offer faster landing, lower parking charges, and lower refuelling charges as Rajasthan charges only 4 per cent sales tax on aviation turbine fuel. Since it will largely caters to cargo, the airport does not plan to add any frills like air-conditioning, LCD panels, expensive lounges. Typically, cargo airports can be 40-60 per cent cheaper to built than those meant for passengers.

The airport is eyeing low-cost carriers like Air Asia, which is looking for a hub in India, or SpiceJet which plans to soon launch its international operations. Rajasthan Aviation Infrastructure is also in talks with local and international logistics majors, and hopes to rope in some of them.

Overall, the project needs 4,500 acres which it plans to acquire soon as much of this is government land. In the first phase, the airport entails an investment of Rs 500 crore. It will be funded by a debt-equity mix of 70:30. The promoters are investing around Rs 50 crore and hope to raise the rest by diluting equity to strategic investors and banks.

Sumitomo Mitsui Banking Corporation, the nodal bank for Japanese investment in DMIC, will help find investors. Fraport AG, the technical consultant to the airport, could pick up a minority stake in the project, while Rajasthan Aviation Infrastructure is picking up a 5 per cent equity in the project with an option to increase it to 13 per cent.

The promoters, who come from non-aviation background, have roped in professionals and former bureaucrats in their board of advisors. They include former Department of Industrial Policy & Promotion chairman Ajay Dua, who is the chairman of Rajasthan Aviation Infrastructure, chief operating officer Mark Martin who served as the head of operations for SpiceJet and chief commercial officer for Rwanda Air, and senior vice-president Manu Trikha, who brings in the knowledge of setting up a multi-modal logistics hub.

It has also roped in tax expert Mukesh Butani of BMR Advisors, former DGCA Satender Singh, former bureaucrat P J Vincent, and Anckur Srivasatava, a real estate expert.

First Published: Thu, March 25 2010. 01:20 IST