The Hindu Business Line : Mumbai Intl Airport plans Rs 7,000-cr investment

Modernisation plan
MIAL would be submitting a master plan covering 20 years of future airport operations in September.
HR consulting firm Mercer has come aboard to change management and HR strategy for MIAL.

MR G.V. KRISHNA REDDY (left), Chairman, Mumbai International Airport Pvt Ltd, and Mr Sanjat Reddy, Managing Director, at a press conference in Mumbai on Wednesday. — Paul Noronha

Mumbai , June 14

Mumbai International Airport Pvt Ltd (MIAL), the 74:26 joint venture between the GVK-SA Consortium and Airports Authority of India (AAI), managing airport operations here since May 3, would invest at least Rs 7,000 crore over the next 20 years to modernise facilities.

The overall estimate could become higher; Rs 5,800 crore over the next seven years being a better determined figure for the present. "The funds have been tied up, investment won't be a problem at all," Mr G.V. Sanjay Reddy, Managing Director, MIAL, said at a press briefing today. The company has provided bank guarantee to the Government for the equity component in investment spanning seven years; it has also signed the first set of documents for debt.

Concession period

The concession period under the Operations Management and Development Agreement (OMDA), signed on May 3, is for 30 years and MIAL would be submitting a master plan covering 20 years of future airport operations in September. Many aspects of planned facilities, funding and mode of project execution would be clearer by then. Netherlands Airports Consultants BV (NACO) would lead the process in airport design and master planning. Changi Airport, Singapore, would review the master plan.

Human resource consulting firm Mercer, has come aboard to change management and HR strategy for MIAL, which has 2,600 employees. The OMDA requires MIAL to run the city's Chhatrapati Shivaji International Airport (CSIA) with existing staff and train them to international standards.

Mr Reddy cautioned that while the city was justified in having high hopes for CSIA, they should be "reasonable expectations" as the way ahead was most challenging. The situation best summed up in CSIA's description as "city-locked", its meagre area heavily encroached upon, a village in the middle, a river prone to flooding on the periphery and some of the city's biggest drains passing right through it.

Available acerage

Deducting for colonies et al, actual acreage available is just 1,450 acres, as against 5,000 acres in Delhi and 5,500 acres for the proposed new airport in Hyderabad. "Future development is very dependent on utilising this minimum amount of land and getting the maximum out of it," he said.

Airport development would be in three phases, the first being a 100-day plan to improve facilities in select areas. Second phase involves upgrading the existing terminals, 1A and 1B. Long-term plans include a new single terminal at Sahar for domestic and international operations (which would free up existing terminals at Santa Cruz for low cost airlines) and a new cargo facility. According to Mr Reddy, 37.8 per cent of revenues would be shared with the AAI.

Air traffic

CSIA accounts for 37 per cent of India's air traffic. It saw over 1.76 crore passengers last year and handles some 490,000 tonnes of cargo annually. Given the pace of growth, future infrastructure would require a second parallel runway despite space constraint.

"We will have to rehabilitate the surrounding slums if we are to make the second runway. That will have to be done," he said.

Though airport capacity is a function of aircraft size, the number of peak hours and the number of aircraft movements that ATCs can handle, it is estimated that sans second runway the maximum capacity at Mumbai would be 25-27 million passengers.

"We would like to build capacity of 40 million," Mr Reddy said. The second runway would need relocation of several aircraft hangars, among them facilities belonging to Air India, Jet Airways and large corporate houses like Reliance and Tata.

Mr Reddy said that as per the OMDA, MIAL had the first right of refusal for developing the proposed new airport in Navi Mumbai.

Though MIAL would have to go through the bidding scheme, should it fall 10 per cent short of the highest bid it would enjoy the right to revise and match the offer.

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