India approves $355m greenfield airport projects

The Indian government has approved the airports development, two of which will be procured as PPPs, in Andhra Pradesh.

The Ministry of Civil Aviation has approved three greenfield airport projects in the state of Andhra Pradesh, two of which will be developed under the PPP model, after June legislation facilitating full foreign ownership of Indian airports. 

The steering committee on greenfield airports, headed by the Ministry, discussed four new airport projects in a meeting last week. It then approved three projects in Andhra Pradesh and recommended “site clearance” for a fourth project in Kothagudem, in the state of Telengana.

The Bhogapuram International Airport will be developed by the state government as a PPP at an estimated cost of 22 billion rupees ($329 million; €297 million). It aims to cater to 6.3 million passengers per year in its initial phase. At an estimated cost of 880 million rupees each, the Dagadarthi airport will also be procured as a PPP, with a third airport at Orvakallu to be developed by the state government. Both projects are designed to serve as domestic low-cost airports. 

The site clearance for the Kothagudem airport paves the way for it to become the second greenfield airport to be developed in the state besides Hyderabad International airport. 

In August, Indian infrastructure conglomerate GMR Group won a PPP concession to develop and operate Mopa Greenfield airport, in North Goa, with a total investment of up to 30 billion rupees. It will be the group’s third airport project, as it also owns and operates Delhi and Hyderabad airports. 

At present, India’s airport sector is largely controlled by state-backed Airports Authority of India, with local conglomerates owning just four international hubs. Apart from GMR, GVK Group owns Mumbai and Bengaluru airports. 

Since the government revised foreign direct investment rules in June, full foreign ownership is now permissible for both greenfield and brownfield airports without government approval. The decision was part of a broader liberalisation drive to boost foreign capital flows.