Mayawati set to fly with a new airport at
Greater Noida

The UPA ignored the government of India’s 1997 policy on airport infrastructure that
prohibits setting up of new airports within 150 kms of existing ones. It cited congestion,
pressure on associated services and threat of monopoly to clear the Uttar Pradesh proposal

By Shahid Faridi

The Congress-led United Progressive Alliance government has decided to allow the Uttar Pradesh government to set up a new international airport at Greater Noida.

The UPA government’s decision follows the attempt by the Mayawati government to revive the project that Mulayam Singh had conceived but could not execute.

The Mayawati government had approached the central government for an ‘in principle' approval for setting up a greenfield international airport, called the Taj International Aviation Hub, to serve the Taj Economic Development Zone that is proposed to come up along the Taj Expressway near Greater Noida.

The project was originally proposed by the Mulayam Singh Yadav government in May 2002 and technical approval was granted by the Union government. But the then state government did not pursue the project.

Now, in 2007, when the Mayawati government sought fresh approval for the project, the central government asked it to undertake a new study for the preparation of a techno-economic feasibility report (TEFR) to reassess the viability of the project and its impact on the Indira Gandhi International Airport at Delhi that is currently being restructured.

The Mayawati government of Uttar Pradesh submitted the fresh TEFR. As per the new TEFR, the Taj Expressway Authority (TEA) would be the sponsoring authority for the project and would form a joint venture special purpose vehicle (SPV) for its implementation. The required land for the airport would be acquired by the TEA and made available to the SPV.

The new international airport near Greater Noida will actually be located south of village Jewar, 68 kilometres from Delhi's IGI airport. This is the area where the government of Uttar Pradesh is planning to set up major industrial projects such as special economic zones, agricultural export zones and mega power plants.

The proposed Taj International Aviation Hub falls under the proposed Delhi-Mumbai Industrial Investment Corridor, being planned with Japanese aid and being created along the sanctioned Delhi-Mumbai Freight Corridor.

According to the government of Uttar Pradesh, an international airport in the region is essential not only to give impetus to the planned industrial growth in the region, but would also provide access to export facilities for perishable farm produce. It would in addition help in realising the tourist potential of the Taj Mahal and other tourist destinations in the region.

The airport will be developed on roughly 1,500 hectares of land with an investment of about Rs 3,505 crore through a public private partnership. The project cost of Rs 3,505 crore mentioned by the government of Uttar Pradesh does not include the cost of land.

The state government plans to contribute 26 per cent of the equity through its agencies while private participants would hold 74 per cent. The revenues of the proposed international airport are projected to grow from Rs 169.9 crore in 2011 to Rs 2,187.3 crores by the year 2038.

There was a hitch in setting up the new international airport near Greater Noida. The government of India's policy on Airport Infrastructure, 1997, states that no greenfield airport will normally be allowed within an aerial distance of 150 kilometres of an existing airport.

But the UPA government has ruled that the above policy is not relevant in the prevailing conditions for the following reasons. First, there has been a phenomenal growth in air traffic in the country in the recent past and this is expeced to continue in the coming years. This growth in air traffic requires simultaneous growth in air infrastructure to address the issue of congestion. Secondly, the increasing private participation in airport development and the necessarily monopolistic nature of this sector makes it imperative for the government to facilitate competition. Thirdly, there is a need to decongest major metro cities. Thus, while the upgradation of Delhi's IGI airport may help it cater to more than 40 million passengers per year, this upgradation will also exert tremendous pressure on associated services.

The Union government, therefore, while approving the government of Uttar Pradesh's proposal, underlined the fact that all over the world in major cities such as London, New York, etc there is one major airport and several secondary airports. The only major issue required to be settled before setting up the new international airport in Uttar Pradesh was to handle the central government's contractual obligations towards the joint venture company - Delhi International Airport Ltd (DIAL) - involved in the upgradations of Delhi's IGI airport.

Under the State Support Agreement signed by the government of India, DIAL has been given Right of First Refusal with regard to a second airport within a radius of 150 kilometres from the Delhi airport within a margin of 10 per cent. There is a sunset clause of 30 years.

The site proposed by the government of Uttar Pradesh is 68 kilometres from the IGI airport. So the Right of First Refusal would be applicable. The government of Uttar Pradesh has agreed to incorporate the Right of First Refusal granted to DIAL in the tender and bidding documents.
Besides this, no commitment on traffic or any other issue has been given to DIAL.

The government of Uttar Pradesh underlines that traffic for the proposed international airport would include traffic diverted from Delhi airport, additional traffic due to development in the catchment region, additional tourism traffic to Agra, transit and trans shipment traffic from overflying flights.
In the initial phase, only five per cent of IGI airport traffic is expected to spill over to the new airport. But, according to Uttar Pradesh government's projections, this percentage may go up to 15 per cent by the year 2036. Besides, eight per cent of the air cargo is likely to be diverted from Delhi airport to the new airport in Uttar Pradesh by the year 2011. But this traffic too will rise to about 20 per cent by the year 2035.

A note seeking approval of the project by the Union Cabinet has been submitted by the ministry of civil aviation.