Only a half of the ongoing airport projects in the country would be completed in the next three years while the rest would be delayed owing to the tough land acquisition norms, regulatory hurdles and absence of a national-level policy, a ratings agency said in a report.
"Currently, about 64 airport projects worth investment of about Rs 1,51,500 crore are under implementation/announced stage. Of these, about 33 projects accounting for about 25 per cent of the total outstanding investment are under advance stage of construction and are expected to get completed up to FY17," Care Research said.
Noting that the Planning Commission has envisaged investment of about Rs 87,700 crore during the 12th Five Year Plan in the sector to meet the increasing demand, the report said that unlike other infrastructure projects, the airport project requires substantial land at a single location.
CARE Research expects the air passenger traffic to witness a double digit growth during FY14-17 but a moderate growth in air passenger handling capacity would dampen air passenger traffic growth up to FY17, it said.
"Setting up of an airport needs approval from about 16-17 agencies at Central and state levels. Therefore airport projects are prone to time overruns," it said.
Stating that delay in land acquisitions is expected to remain a major challenge, the report said balance projects involving 75 per cent of outstanding investment are expected to commission beyond FY'17.
The report also observed that airport projects have witnessed inordinate delays in the past, primarily on account of land acquisition issues, procedural delays, viability issues and non-availability of funds for expansion.
The airport infrastructure segment in the country does not have a long-term national level policy, though construction of airports takes at least about three years for completion, it said.
Muted central assistance and non-viability of some projects are likely to impact development of airport infrastructure and high leverage of airport infrastructure companies may act as a deterrent for private participation in the near term, the report added.
