In fact, it is estimated that by 2026, over one-third of Delhi's total projected traffic (82.7 million) will be diverted to Greater Noida airport (28.4 million), and by 2036 when DIAL expects to handle nearly 100 million traffic, Greater Noida will attract 82.7 million passengers.
By 2036, Greater Noida airport expects to divert half of Delhi's traffic (49.8 million against 100 million). A substantial diversion of cargo is also expected.
These estimates, according to the note, have been derived considering the traffic diversion from Delhi due to better connectivity with the catchment area. The authorities expect direct and induced traffic due to the setting up of a new greenfield airport.
In addition, according to the proposal, "there will be potential increase in freight and passenger traffic due to the Delhi-Mumbai and Delhi-Kolkata freight corridors being set up and the boom expected due to the development of a special economic zone (SEZ) and large mega power plants in the area".
Additional traffic is expected due to the creation of a "gateway airport" close to Agra in Uttar Pradesh. It is felt that a lot of passengers who now go through Delhi to reach Agra would fly directly to the tourist city.
It is also argued that Agra is an agriculturally rich area and this potential can be best exploited by providing air cargo facilities from the area.
Given these projections - which appear over-optimistic and somewhat unrealistic - senior finance ministry sources argue that it makes no economic sense whatsoever to go in for the new Noida airport, if Delhi airport is to remain viable.
Delhi airport is being developed at a cost of Rs 8,900 crore (Rs 89 billion) for the first phase till March 2010 and assuming that is the cap for investment, the airport would begin to break even at 47-50 million traffic.
But Delhi airport is being modernised at a cost of Rs 30,000 crore (Rs 300 billion) in three phases till 2026, and then break-even becomes difficult to estimate as it ends up being like a "perpetual construction site," a DIAL source explained.
Moreover, he argues that such a proposal would not be viable for airlines which will be forced to divide their resources between the two competing facilities. Civil aviation ministry sources also agree that this is not the right time for a new airport in the region.
When contacted, DIAL sources said these estimates were unlikely to bear fruit, adding if such an ambitious plan was given a go-ahead, it would make their own projections go awry and would lift the confidence of their investors. "I don't know if investors would in any way invest in airport projects in the country if such things are allowed," said a DIAL source.
Meanwhile, DIAL has its hands full with Delhi airport - both in terms of management time and the kind of financial resources it needs. Also, it shares a higher percentage of revenue with the AAI (just over 45 per cent) as against 38 per cent, to be shared by Mumbai International Airport Ltd (MIAL).
"This, however, was not on the cards. If we had known, we could have bid differently," says one DIAL official.
The project is to be developed over 1,500 hectares of land at a cost of Rs 3,505 crore (Rs 35.05 billion) through public-private partnership by forming a special purpose vehicle for implementation.
This does not include the land cost, which is expected to be made available by the state government to the SPV. The project will have a pre-tax internal rate of return of 24 per cent.
No need for Noida airport, DIAL tells govt
FinMin sees no need for Noida airport
