Mumbai to have 2nd International Airport by 2013

With demand for air travel rising leaps and bounds, especially in the metros, the Government has approved the proposal for setting up a new international airport in Mumbai. A meeting in this regard was held between Praful Patel, the Union Minister for Civil Aviation and Vilas Rao Deshmukh, Maharashtra's Chief Minister, in New Delhi. All pending issues with the state government would be resolved in a month or two and the Government would then proceed for Cabinet approval for the building of the greenfield airport. However, one will have to wait for seven more years to catch a flight from the second international airport. The proposed new airport will be ready only by the end of 2013. The new Mumbai airport is proposed to be developed through the PPP (Public-Private-Partnership) route. The Airports Authority of India (AAI) and the City and Industrial Development Corporation (CIDCO) of Maharashtra will hold 13% each while the private player will hold a 74% stake.

The bidding process and selection of JV partners for building the airport would be completed within 2007. The new airport is expected to absorb 10mn passengers per annum in 2013. This will double to 20mn passengers per annum by 2020, 30mn passengers per annum in 2025 and ultimately 40mn passengers per annum by 2030. The revised basic cost of airport project in 2006-07 is Rs42.35bn spread in four phases. In the first phase, the cost is Rs13.4bn followed by Rs9.9bn in second phase Rs4.65bn in third phase and finally Rs3.83bn in the fourth phase. Upon the approval of the Government, the project implementation will commence from January 2007 and end in October 2013. The financial analysis indicate a project internal rate of return of 18% taking into consideration the basic cost of airport project spread over in 30 years thereby making project attractive for Public-Private partnership basis.

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