Page 85 - Enhancing innovation and participation in smart sustainable cities

United for Smart Sustainable Cities
Enhancing Innovation and Participation

ƒ Greenfield airports in Maharashtra: The Government plans to build five domestic airports at Solapur
(INR3.1 billion), Amravati (INR2.8 billion), Shirdi (INR2.6 billion) and Jalgaon (INR2.6 billion) on PPP basis.
ƒ International airport in Uttar Pradesh: The Government of Uttar Pradesh plans to develop an
international airport at Kushinagar worth INR 3.5 billion through Design, Build, Finance, Operate, and
Transfer (DBFOT).
ƒ International airport in Mopa, Goa: The Government of Goa plans to develop its airport with an
investment of INR 30 billion over the next four years on a PPP basis.
ƒ Greenfield international airport at Navi Mumbai: The new airport is being built through PPP and the cost
of the project is estimated to be between INR 32 billion and INR 40 billion.

2.3 Results
The Government’s focus on PPP has borne exceptional results during the eleventh five-year plan. It is also
observed that the private sector has played an unprecedented role in the area of airport development. Five
international airport projects were successfully completed through the public–private partnership (PPP) mode,
viz. Greenfield development of Hyderabad and Bengaluru international airports and modernization of Kochi, Delhi
and Mumbai international airports. The total investment made by private airport operators in the last five years
was to the tune of US $ 6 Billion. In recent years, airport modernization in the country has taken a new form, with
private players bringing in new technologies that not only improve airport operations but also enhance customer
experience.

These projects have had an impact also on the Gross State Domestic Product (GSDP). National Council of Applied
Research’s (NCAER) study of the Hyderabad and Delhi Airport has shown that Hyderabad Airport’s operations
contributed USD 1.25 billion to the national GDP in 2009-2010; contribution relative to the State’s (AP) GSDP was
1.55%. Similarly, Delhi Airport’s operations contributed about USD 5 billion to the national GDP in 2009-10;
contribution to the State’s (Delhi) GSDP was 13.35 %.

The other outcomes of the PPP for the airport sector in India are as follows:
Job multiplier effect: With the airport-centric approach of urban development, gainful employment has been
generated to the tune of 1.57 million in the case of Delhi Airport (representing 25.9% of Delhi’s total employment)
and 840 000 jobs in the case of Hyderabad Airport.
Service levels and improvements – knock-on effects on government run airports and international rankings of
Indian airports: PPP airport projects have consistently been ranked at the top of the Airports Council
International’s (ACI) Airport Service Quality (ASQ) rating for the Best Service Delivery in their respective categories.
This drive and focus on the quality has raised the bar for the Indian aviation industry; the new terminals developed
by the Government; and its service levels, having been at par with the international standards, as envisioned by
the Indian Government.

Fulfilling the state responsibility of Connectivity and Access to air travel: Freeing up of public funds has enabled
the Government to focus on regional connectivity and the development of smaller airports, which were earlier
underserved or unserved, across the nation. This has enabled the State to fulfil their responsibility towards
bringing access to air travel for every citizen.

3 Conclusions

Lessons learnt
The PPP model for Indian Airports has surpassed the initial expectations in terms of economic benefits and better
infrastructure. This has also created a whole new travel experience, besides providing decent facilities for
travellers.

Despite various bottlenecks, PPP in infrastructure holds great potential in a country like India. A long-term
sustainable infrastructure plan needs to be developed that will create an environment for increased private sector
investments for faster execution of the projects. Collective efforts by both the private and public sector and
enabling policy provisions may help in achieving the infrastructure PPP agenda of the government.

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