India unprepared for aviation boom


India is not prepared to meet the development challenges required to satisfy the infrastructural needs of its fast-growing aviation sector.

According to a new report by the Centre of Asia Pacific Aviation (CAPA), Indian authorities must plan for massive investment of up to US$40 billion in airport development by 2025, including the construction of up to 50 greenfield airports, if it is to meet the rise in passenger traffic.

Based on 8% annual GDP growth rate, CAPA predicts that passenger numbers will rise from 143m in 2011 to 452m by 2021, a similar rate of growth witnessed by China in the preceding decade. Meanwhile the scheduled airline fleet will grow from 430 to 1,030 aircraft, and general aviation could see even faster growth from 750 to over 2,000 aircraft.

The government is expected to spearhead development, co-investing in public-private partnership products, but its track record stresses underachievement. Under the 2007-2011 Five Year Plan, total infrastructure investment of US$500bn fell short at US$425bn. Then, just months into the 2012-2017 Five Year Plan, the infrastructure budget has already been cut by US$200bn due to a short-term slowing GDP growth. 

“Overall investment requirements in airport infrastructure are significantly underestimated. But what is of greatest concern is that in an industry which requires a long-term horizon looking 20-30 years ahead, there is no capacity plan for the AAI beyond 2017,” reports CAPA.

Adding to the lack of foresight is the inability to act. The Civil Aviation Ministry has been ordered to take time-bound actions to begin building 16 greenfield airports and spruce up another 17 airports using public-private partnerships.

Barriers to land acquisition have severely disrupted development plans nationwide however, having already inflicted delays at the Navi Mumbai, Goa, and Nagpur airports for several years. According to the Economic Times, state governments have turned down or ignored most of the 61 requests for land allotments made by the Airports Authority of India for projects across the country, and experts caution that the cost of land alone may make many projects unviable.

In sum, CAPA advocates “the development of an integrated national master plan and the need to adopt a new proactive mindset which does not wait for current infrastructure to become saturated before planning for expansion, but instead starts to anticipate future requirements ahead of time”.

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