India opens $1.3bn air terminal in capital

Until now, international travellers arriving in New Delhi transited through a dingy socialist-era terminal that seemed out of kilter with India’s status as one Asia’s fastest-growing economies. As the airport had few aerobridges, most passengers rode rickety buses to reach the gloomy arrivals hall.

But India’s capital is finally getting an international gateway befitting its aspirations as an emerging global superpower, with today’s inauguration of a gleaming new ultra-modern air terminal.

Built at an estimated cost of $1.3bn (€1bn, £860m) by a consortium led by Bangalore-based GMR, the nine-storey glass-and-steel terminal – with 78 aerobridges, upscale boutiques and eateries – can accommodate 34m international and domestic passengers a year and will raise the airport’s total capacity to 60m.

Its inauguration comes as India’s air travel revolution is regaining momentum after last year’s slowdown, with passenger traffic from January to May up 22 per cent over last year.

“We want to show the world what a world-class airport we have,” G.M. Rao, founding chairman of GMR – one of India’s pioneering new breed of infrastructure companies – said in a recent television interview. “It’s a brand for the country.”

New Delhi’s swish new terminal – part of a $2.6bn modernisation of the whole airport – is the jewel in the crown of a once controversial limited airport privatisation programme that has seen India’s four biggest airports put under private investor control, and transformed the flying experience for many Indians.

Bangalore and Hyderabad, the country’s main IT hubs, both opened swanky new airports two years ago, and their overcrowded state-run facilities were shut down. Both airports were “greenfield” facilities – built from scratch on undeveloped sites. GVK, the Hyderabad-based infrastructure company, is building a $2bn new international terminal at Mumbai, though the airport’s small size means air traffic congestion – and long delays – will remain a problem. Plans to build a greenfield airport in Mumbai, however, are still bogged down, awaiting environmental clearance.

International and domestic airlines will start operating from New Delhi’s new terminal in two phases over the next month, four years after GMR was given control of the airport – which handled 25m passengers last year.

Amber Dubey, an analyst with KPMG, calls the rapid completion of the terminal a “remarkable feat,” demonstrating India’s ability to build world-class infrastructure if given a chance. “The message is, ‘we can, and we will,’ ” he said.

But even as India’s political and business elite gear up to celebrate the country’s newest status symbol, dozens of other Indian airports – at business hubs like Chennai, major cities like Calcutta, and tourist sites like Varanasi, Goa and Jaipur – are still firmly under state control, and remain dismal utilitarian relics of the socialist past.

The Airports Authority of India – which holds minority equity stakes in all four privatised airports – has a $3bn plan to upgrade and expand the basic infrastructure of 35 of the busiest of these facilities. But raising funds may prove difficult, as most of the airports AAI operates are loss-making.

Even if cash can be raised, many analysts doubt that the airports authority – with lack of talent at the higher levels and excessive staffing at the lower levels – has the vision and entreprenuerial drive to satisfy India’s increasingly demanding consumers.

“The quality of Indian airports is almost like a national shame,” said one industry analyst, who asked not to be identified. “They are almost worse than the railway stations in Europe.”