Greater Noida airport project rocked by minor turbulence from finance ministry

Uttar Pradesh chief minister Mayawati's proposed Greater Noida airport has hit a patch of turbulence. The finance ministry has questioned the need for the Rs3,505-crore ($900 million) project. It has asked why the existing airport in Delhi cannot be developed fully to meet the NCR's demand.

The main complication is that the Delhi airport was privatised just last year, and a Rs8,900-crore modernisation plan is underway. The GMR group-backed Delhi International Airport (DIAL) is not in favour of the new project, and has asked the aviation ministry to ensure that the developers of Greater Noida airport - for which the group enjoys the first right of refusal - should have the same conditions as DIAL.

The finance ministry, too, has also asked the aviation ministry whether the developers of the Taj International Aviation Hub (TIAH), the name of the proposed Noida airport, and the Delhi airport would get a level-playing field or not.

The contentious issue is that the Delhi airport was leased out to the GMR group on condition that it would develop only 10 per cent or 250 acres of airport land for commercial purposes, including 50 acres for a hospitality district.

But the greenfield TIAH may not have any such restrictions. If its non-aeronautical revenues are higher, it could mean lower aircraft parking and movement charges, which will unfairly tilt the scales. The proposed greenfield airport policy also includes incentives like tax sops and land at cheap rates.

The Noida project site is just 72 km away from Delhi Airport and DIAL has told the ministry that it will be sufficient for Delhi's demand for many years. Just last week, aviation minister Praful Patel had said that airports within 150km of existing ones are not allowed. He was referring to the impending closure of the existing Bangalore and Hyderabad airports, once new airports open there next year.

But two factors can make a difference here. Delhi and Mumbai are exceptions to the rule, because big cities worldwide often need more than one airport. Second, with the rift between the Left parties and the ruling Congress over the Indo-US nuclear deal, the ruling combine is in no mood to upset the mercurial Mayawati. Opinion polls have shown her Bahujan Samaj Party's (BSP's) Dalit-Brahmin formula may bag a large number of seats in any election to be held in the near future.

In any case, DIAL has the first right of refusal for TIAH. This means that if its bid is within 10 per cent of the highest offer, it gets a chance to match the highest offer. Only if the group refuses will the other developer get the airport project.