India plans Dh44.4b investment in airports

Dubai: The Indian government is planning to invest more than $12.1 billion (Dh44.4 billion) to improve airport infrastructure within the next five years, a top official said.

Out of this, $9.3 billion (Dh33.48 billion) is expected to come from the private sector and foreign investors, Ajit Singh, India’s Union Civil Aviation Minister said in Dubai on Wednesday.

“We expect to see $12.1 billion investment in improving airport infrastructure under the 12th Five-Year Plan, of which $9.3 billion is expected to come from the private sector and foreign investors,” he said at a conference, a few days after Jet Airways announced was selling a 24 per cent stake to Abu Dhabi’s Etihad Airways for $379 million. The cash injection along with the realignment of its route networks with Etihad will give the Indian carrier a solid boost and help in its next stage of growth.

Singh defended his government’s decision to allow 49 per cent foreign direct investment (FDI) saying it is a step in the right direction. “The results are already showing in the form of Air-Asia’s entry into the Indian market and the Jet-Etihad deal,” he said.

India’s Tier II and Tier III cities need air connectivity as small businessmen need to travel fast. “For them, time is money. These will require huge investment,” he said.

“Indian capital is not enough to support the future development of India’s aviation industry. We will be able to provide less than half of the capital needed. The rest has to come from outside and we need to allow that to happen,” he said.

A double-digit growth year-on-year is expected to make India the world’s third biggest aviation market by 2020, if the government policies are aligned for growth, the International Air Transport Association (IATA) said in a recent report.

“The agenda to improve infrastructure, reduce costs and evolve a more reasonable taxation structure remains absolutely critical to India’s long-term success,” Tony Tyler, Director-General and Chief Executive Officer of IATA, said, in a speech in India recently.

Facilities

In terms of airport infrastructure, India has got a great deal right in previous years, IATA said. However, the future investment could be spearheaded through Public-Private Partnership (PPP) model that has delivered world-class facilities at Hyderabad, Cochin and Bengaluru.

The Cohin International Airport in Kerala is a perfect example of the PPP, in which the Gulf-based non-resident Indians (NRIs) played a strong role in its development and operation.

Paras Shahdadpuri, President of Indian Businessmen and Professionals Council in Dubai, said, “Red carpet sometimes becomes red tape in India. If formalities are reduced and policies are re-aligned for growth, then we, the NRIs, could help bring more investments from the Gulf to India.”

Citing some of the troubled UAE investment in India, such as etisalat, Emaar and Nakheel, he said, the government should open up more sectors for investment.

He said, bilateral trade between the two countries has grown to $75 billion.

“A holistic approach to airport infrastructure and its management is the need of the hour. Done in a transparent and effective manner, this can help boost international trade and tourism considerably,” Promananda Elangbam, Manager of Marketing at Bangaluru International Airport Ltd, said in an earlier statement.