The skies over Mumbai are set to face a congestion crisis early next decade with the Indian financial capital's existing international airport likely to be overloaded with passengers even after a $2.3bn expansion is completed, according to the city airport's top executive.

GV Sanjay Reddy, managing director of Mumbai International Airport, said bureaucratic hurdles were likely to delay construction of a second airport until at least 2013, a year after the projected completion of the existing airport's expansion.

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The result, he told the Financial Times, would be that if current passenger trends continued, the city's airport would be overwhelmed. "The city is going to be in trouble," he said.

The gloomy forecast underlines how a lack of co-ordination and an excess of red tape are hampering efforts to upgrade India 's creaking infrastructure and undermining Mumbai's aspirations to become a world-class financial centre.

Passenger traffic at Mumbai grew 16.25 per cent to 25.8m in the year to March and is expected to grow at the same rate or faster in the coming years. That would put it on track to exceed within the next two to three years the target capacity of 40m passengers a year for the existing airport after expansion.

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India has embarked on an ambitious programme to upgrade its long-neglected airports, awarding contracts to private sector-led consortia to redevelop or build facilities in major cities.

But Mumbai's problems come as even the new airport projects at the most advanced stages of completion - those in Hyderabad and Bangalore - are battling government efforts to renegotiate airport user fees outlined in their original contracts.

Both airports are also fighting court cases to enforce guarantees that the cities' old airports would be closed for commercial use once the new ones were opened.

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Mr Reddy is overseeing the upgrading of the terminals and other facilities at Mumbai's airport and shifting an estimated 450,000 slum dwellers living on airport land to new sites nearby.

But while this work is proceeding on schedule, efforts by the government to build a new airport in Navi (New) Mumbai on the city's outskirts have been delayed by objections from the environment ministry.

Raajeev Batra, an executive director at consultancy KPMG, said any serious delay would mean "disaster" for Mumbai given the air traffic increase.