FinMin sees no need for Noida airport

The finance ministry has opposed the proposed airport at Greater Noida, and has instead favoured upgrading infrastructure at Delhi airport, which it says makes more economic sense.

This has come as a shot in the arm for the GMR group, the private sector developer of Delhi airport, which has been opposing another airport so close to the existing one.

The Ministry of Civil Aviation had recently put out a Cabinet note for an airport at Greater Noida. The proposal is facing resistance from various quarters as it violates the present policy of not having competing airports within 150 km radius of each other.

The proposed airport at Greater Noida is 68 km from Indira Gandhi International airport, which is being modernised by the Airports Authority of India and the GMR group through Delhi International Airport Ltd (DIAL).

The finance ministry has held comparative benefits and the cost of upgrade of infrastructure of the existing airport vis-à-vis building a greenfield airport need to be studied before a decision to go ahead with the new airport is taken.

Accordingly, North Block has suggested a detailed re-look at the proposal before it is put up before the Cabinet, official sources say.

DIAL has written to the civil aviation ministry that according to global norms, a second airport comes up in such close proximity to the existing one only when the first one is saturated. Otherwise, a second airport leads to two weak airports and huge additional costs, it has said.

The finance ministry has also pointed out that the proposal does not have any traffic projections, and hence it is not known whether the airport will be able to generate enough traffic.

It has also asked the ministry of civil aviation to explain its role in matters regarding monitoring the performance standards in the absence of a concession agreement.

At present, there is no model concession agreement for greenfield airports.