The airport that almost didn’t happen

But Bengal’s newest terminal could still fulfill its promise,

When an ATR carrying politicians and movie celebrities took off from the Kazi Nazrul Islam Airport near Durgapur on Monday, it marked the beginning of an exciting journey for India’s youngest airport and the culmination of a project announced in 2008 but hindered by cost overruns and other issues.

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Located at Andal on the outskirts of Durgapur, about 180 km from Kolkata, the airport is India’s first private greenfield terminal and has been modelled on Singapore’s Changi Airport. There are now two daily flights to Kolkata and Bagdogra by Air India and Pinnacle Air, respectively. “It’s a modest beginning. We will bring a wider bouquet of flight choices soon,” says Partha Ghosh, Managing Director of the promoter Bengal Aerotropolis Projects Ltd (BAPL).

The airport was conceived as the country’s first ‘aerotropolis’, complete with an industrial park, a logistics hub, and residential and commercial projects. The project got a boost when Changi Airports International picked up a 26 per cent stake in BAPL. Changi later raised its stake to 36 per cent.

The remaining equity is held by Indian promoters, including IL&FS Airports Ltd and three individuals — Partha Ghosh, Utsav Parekh and Ram Ratan Modi. But just when the stage was set for some big bang development, a series of issues hit the project.

Hurdles galore

In a major procedural lapse, the then Buddhadeb Bhattacharjee-led State government approved the project in a coal mining area without seeking the concurrence of Coal India Ltd or the coal ministry. The State-owned miner put its foot down. After nearly a year, a compromise was arrived at in April 2009. The airport project was shifted a little to free a part of the coal-bearing land.

But the biggest troubles came during land acquisition.

BAPL wanted to acquire nearly 2,300 acres directly from the farmers. The State government placed the project on high priority and issued acquisition notices. The acquisition drive came at a time when the Singur-Nandigram land acquisition issue was still fresh and the State’s politics was going through a major churn that would ultimately overthrow the 34-year Left Front government in May 2011.

In October 2009, the first tranche of 534 acres was acquired by the State and handed over to BAPL, but the seeds of discontent had been sown.

By 2010, the project faced severe agitations. And to complicate matters, the Mamata Banerjee government announced a hands-off policy on land acquisition.

A truce was reached by scaling down the land requirement by 500 acres and introducing a compensation and rehabilitation scheme.

The State government, too, began supporting the project. Ghosh claims he rolled out the “best compensation package in the industry so far”.

Apart from offering hefty cash compensation to land owners, sharecroppers and landlesslabourers, farmers were also offered developed land within the project area. And to those not keen to part with their farm land, alternative land was offered.

Land acquisition and construction of the airport was more or less over in 2012-13 and BAPL started paying financial charges to lenders from April 2013.

But the airport was not eligible to get regulatory clearance for a bizarre reason — a high tension electricity line ran across the runway. The State utility failed to shift the line in time, again due to land acquisition issues. This was finally sorted out last year but at major cost overruns. Ghosh claims that the delay escalated the total project cost by 20-25 per cent to ₹650 crore.

The way ahead

As things stand, BAPL has cleared all hurdles. The State government has offered a six-year sales tax break on aviation fuel sales at the airport. This coupled with lucrative parking charges is likely to make the airport attractive to airliners.

BAPL is also keen to get a ‘diversion airport’ status. Currently, Bhubaneswar is the only airport in the region, receiving flights diverted due to poor weather and other unforeseen events.

But a lot still needs to be done. The airport city project was conceived keeping in mind the easy rail connectivity and proximity to Kolkata port. The idea was to attract industries in setting up their logistics hub in the city for easy transhipment between air, rail and road.

That was at a time when India as well as West Bengal was witnessing a rush of investment proposals. Things have changed since. Investment flow has dried up and the perception of West Bengal has taken a beating after the Tata Nano fiasco in 2008.

There are proposals for commercial developments at the airport city but none at the scale conceived initially.

Ghosh says that once the airport is operational it will be easier to attract investments. “I am sure BAPL would usher in a new phase of development in the region,” he says.

writes: Abhishek Law 

http://www.thehindubusinessline.com/features/the-airport-that-almost-didnt-happen/article7224274.ece

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