Chennai airport’s renovation languishes as government makes up its mind on inviting a private investor

Air passengers leaving from and landing at Chennai have lost count of how long work on the construction of two new terminals has been going on. From late 2011, several dates were set for the inauguration of these new terminals — one domestic and the other international. The last mentioned date was of course Independence Day, but the project remains far from complete. And after the Union Civil Aviation Minister, Ajit Singh, visited the airport last month it appears that work has come to a standstill.

Unlike the greenfield airports at Hyderabad and Bangalore, which were developed through the Public Private Partnership (PPP) mode, the existing Chennai airport was taken up more as an expansion-cum-modernisation project. Consequently, the Ministry let the Airports Authority of India (AAI) handle the work. After repeated delays at all stages, the AAI even did a kind of soft launch and trial at the domestic terminal on May 1.

But so much work remained to be done that it could not possibly inaugurate the facility or let flights operate on a regular basis from this terminal. From the outside, the domestic terminal still looks like a shell. There is no sign of any activity now to complete what remains to be done. AAI sources say that the Ministry/government may still decide to invite private participation in the project, never mind if it is at this late stage.

Limited project

“Given the constraint on resources, the government is seriously considering the PPP mode to complete the works. We estimate that a few hundred crores will have to be spent on the domestic terminal and much more than that on the international terminal.

Once the Ministry reviews the progress and re-estimates the balance costs involved, it could take a final call on the nature of the project. The bulk of the work has been done, but the finishing requires a lot of funds and attention to details. Then comes the maintenance issue,” a senior AAI official said.

Enquiries revealed that though the aerobridges have arrived, they have still to be calibrated. That takes time, as do many other loose ends that have to be tied up before the terminal can be pronounced ready. The question is: what can the private partner expect from this venture?

Given the Comptroller and Auditor General of India (CAG) report on the Indira Gandhi International Airport in New Delhi, and the facilities that were given on a platter to the developer, there is very little that the private player joining the limited Chennai project can hope for. After all, there is no space or land to be leased; not much investment left. Only the completion of the project, and then its maintenance and operation. What might a private investor find attractive at this stage in the full knowledge that returns are not good enough? Surely, it can’t be hope of undue favours from the government.

The modernisation and expansion of the airport were cleared with an investment of Rs.2,350 crore, with about 60 per cent of it for the two terminals. The existing airport handles about nine million passengers a year, but the new terminals hope to more than double that capacity.

Pending the decision on involving a private player, Chennai airport continues to languish with its old terminals and “Work in progress” boards, as Metro Rail too gets ready to begin its work on a station. Among the major metropolitan cities, Chennai continues to have the worst airport.

There is no word yet on whether the State government, the Centre, and the Aviation Ministry still want a greenfield airport near Sriperumbudur as suggested earlier. Even the land for the airport was identified and a lot of development has taken place in that region in the hope of a new airport taking shape in the not too distant future. That also gives rise to the question: does Chennai need two different airports and that too so far apart?

jayanth.v@thehindu.co.in

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