The Airports Authority of India would require Rs 16,400 crore (Rs 164 billion) in the immediate future to fund the initial phase of the ambitious airport modernisation project of the government. The funds would be raised through internal accruals as well as from external sources.
It is estimated that the state-run airport operator has a cash reserve of Rs 3,000 crore (Rs 30 billion) and will use bonds and other instruments to raise funds.
Besides, the government also expects that with the privatisation and modernisation of the Delhi and Mumbai airports, it would receive additional funds that could be used for modernising other airports.
According to the government estimates, an investment of Rs 5000 crore (Rs 50 billion) is needed for the first phase of development of the 23 non-metro airports.
For this, Budget support is expected. To modernise these non-metro airports, the government has set up a committee to explore the possbility of developing airports with tourist potential through the public-private partnership route. Besides, the committee would also work out the mechanism for financing the development.
It is also estimated that AAI would require another investment of over Rs 5, 400 crore (Rs 54 billion) in the next few years to spruce up facilities in other airports. The government would provide a budgetary support of Rs 250 crore (Rs 2.5 billion) for this purpose. The remaining will be raised by the organisation.
This investment will go towards upgrading the facilities like terminals, airstrips and navigation equipment in some of the non-metro airports.
Besides, till the time the private partner for the Delhi and Mumbai airports are finalised, the government will continue to invest in the infrastructure of these two airports.
Besides, the government also plans green-field airports in five cities Goa, Navi Mumbai, Pune, Kannur and the multi-modal international hub in Nagpur.
This would require an investment of Rs 6, 000 crore (Rs 60 billion). While developing these airports, the government would follow the new-airports model in Hyderabad and Bangalore.
On the other hand, it is estimated that the Delhi and Mumbai airports would require a total investment of Rs 10,000 crore (Rs 100 billion) to Rs 20, 000 crore (Rs 200 billion) over the next five years.
These investments are required to remove the capacity constraints in the terminal building in the two airports and improve their operations. According to estimates, each airport would require an investment ranging from Rs 5, 000 crore (Rs 50 billion) to Rs 10,000 crore (Rs 100 billion).
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