Even before it gets off the ground, the Navi Mumbai International Airport (NMIA), currently under construction over 2,800 acres, has one dubious distinction that sets it apart. It has missed more deadlines for completion than any infrastructure project in the country!

Conceived in 1997, NMIA has been the brainchild of Mumbai's City and Industrial Development Corp. (CIDCO), the agency responsible for such projects in Maharashtra. The Narendra Modi government that came to power in 2014 also accorded the project top priority and its progress was being monitored by the Prime Minister himself. In February 2018, a groundbreaking ceremony was held at the site presided over by PM Modi.

Following that, in January 2019, at the Global Aviation summit in the city, then chief minister Devendra Fadnavis promised the aviation industry, airlines and Mumbai residents that the airport would be ready by mid-2020. But, despite assurances, Mumbaikars remained skeptical since half a decade had passed but the project remained in stasis.

Baton Changes Hands

The skepticism was justified. In July 2018, the GVK Group announced the financial closure for the first two phases of NMIA with Yes Bank as the lead banker. But subsequent problems faced by the bank and its founder Rana Kapoor, the GVK Group's own financial troubles including a heavily leveraged balance sheet, and the CBI charges against them led to their ouster from the project. Adani Airports Holdings Ltd. (AAHL), which had won the privatisation bid for a clutch of smaller airports in the country, took charge of NMIA. All these added to the delays in commissioning of construction.

It was only in August 2021 — over three years after the groundbreaking ceremony and after the Adani Group's takeover of Mumbai International Airport Ltd. (MIAL) — which enjoyed the first right of refusal over NMIA — that the construction of the new airport finally commenced. The Adani Group now has the contract to build, own and operate the facility for 30 years with a provision for a 10-year extension on meeting performance requirements. At the end of 40 years, however, a rebidding is proposed with a first right of refusal for the existing concessionaire.

Matters Reach A Head

Since 2003-04, airlines in India have complained of extra costs they have had to bear due to congestion delays in the air. This led to extra fuel being burnt and loss of usage time available on each aircraft during the day.

Also, airlines have been paying the price of carrying extra fuel to meet the requirement of additional flying minutes while they hover to land or await clearance to take off. Airline sources say Delhi and Mumbai together account for a majority of air traffic in the country so any delays in these sectors have a cascading effect on other routes. All these add up in higher cost of operations. Back in 2005-2006, Jet Airways had raised this issue, proposed and even began to levy a congestion surcharge after it estimated that it was losing $6 million every quarter.

Congestion — both on the ground and in the air — has worsened as traffic has grown. Jet Airways' shutdown in 2019 led to a mad rush between incumbents to corner Mumbai slots — both take-off and parking bays. But with space remaining a massive constraint, by the time low-fare airline Akasa Air — which has its headquarters in Mumbai — started operations in August 2022, there was virtually no space for it to park and the airline picked Bengaluru as its main base. It currently has 16 aircraft parked overnight in Bengaluru, three in Ahmedabad and only one in Mumbai. A majority of its pilots are Mumbai based, and several of them maintain a second base in Bengaluru to be available to fly the aircraft every morning.

Aviation consultancy CAPA India CEO Kapil Kaul says the domestic industry has paid a heavy price for the failure to get this critical piece of infrastructure off the ground, a sentiment echoed by airlines, the Ministry of Civil Aviation and other government sources in Delhi. Despite the airport being accorded top priority when the Modi government came to power in 2014, it still took seven years before construction began.

At Breakneck Speed

The 2,866 acre NMIA site was chosen after much deliberation and eventually won out of four sites shortlisted from a total of 17, despite having its own set of challenges. The site had 45 temples and 2,700 households that had to be relocated or removed, a mini hill that had to be cut down to size, and various other hurdles that have been painstakingly removed by CIDCO over the last two decades. The agency, which has spent ₹3,800 crore on the pre-development of the site, will hold a 26% stake in the airport.

The urgency to get the airport up and running is evident on site where there are close to 8,000 construction- and project-related workers. Around 250 staffers of the Adani site office come in everyday to monitor the execution. As of November 2023, there has been 42% progress on the proposed first phase of construction work. The runway is 75-80% ready.

To begin with, NMIA will function with one terminal building of over 2 lakh square metres, which is expected to be ready by December 2024 (the latest deadline), will cater to 20 million passengers per annum, and have a one full-length runway with a parallel taxiway with 42 aircraft maintenance and parking stands. Traffic triggers will lead to further construction of terminals — four at full capacity — and an increase in capacity as the final passenger handling capacity goes up to 90 million per annum.

The airport will also have a dedicated general aviation terminal and one cargo terminal. The terminals will be constructed in five phases and generate their own solar power. All airside transport requirements are proposed to be met through electric vehicles. The general aviation area will be India's largest with 64 aircraft stands and a separate heliport operation wing. Around 8-10% of the land available for the airport can be used for commercial development by AAHL.

The total project cost for the first phase is ₹19,646 crore — State Bank of India has replaced Yes Bank as the lead — out of which ₹12,770 crore is being raised through debt and ₹6,876 crore via equity. CIDCO has already infused ₹430 crore (26% stake) and MIAL ₹1,223 crore (74% stake), taking the total issued equity share capital to ₹1,653 crore. As part of quasi equity, AAHL and CIDCO will contribute ₹1,988 crore and ₹3,235 crore, respectively, going forward. Unlike Delhi and Mumbai, the revenue share for this project will be with CIDCO (as opposed to AAI), which will earn 12.6% of gross revenue for its stake.

Planes, Trains and Automobiles

One of the reasons for choosing the present airport site is its proximity not just to the Mumbai Metropolitan Region (MMR), but also to Pune, Thane and Alibaug. Multiple efforts are on to make the airport accessible to passengers. Connectivity to and from the MMR region is critical to the project since the majority of traffic — almost 60% — is expected to come from South Mumbai. According to B.V.J.K Sharma, CEO, NMIA, the Mumbai Trans Harbour Link from Sewri will act as the main feeder for traffic coming into the airport (see graphic). Two other key projects under construction — the Bandra-Versova Sea Link and the Worli-Sewri Connector — will also be critical for NMIA's success.

"Mumbai is a city of ifs and buts and so if these critical pieces fall in place, accessing the new airport should be smoother than the existing one," says Rina Mehta, a resident of Cuffe Parade in South Mumbai.

What is likely to give the airport a truly international feel is the proposal to build a 10 km automated people movement (APM) system to interconnect terminals and airside operations so that passengers, airline and airport staff can reach different parts of the facility without constantly entering and exiting, a feature seen commonly in airports across Europe.

Mumbai's Ever-shifting Sands

Concerns on whether the airport will ever be ready for operations have plagued Mumbaikars for years. Forever-changing alliances and the mercurial balance of power that defines Mumbai and Maharashtra politics have, over the decades, ensured that infrastructure is built at a snail's pace in the city.

In 2015-16, the then CM Devendra Fadnavis had set up a "war room" in his office to ensure various infrastructure projects in the city were completed. Firm deadlines were set for almost all the projects picked, many non-IAS interns were brought in and a war-like zeal gripped the team put together to pull off these projects. But despite all the might, most of the projects failed to meet deadlines due to lack of coordination between multiple agencies vested in each project. On the priority list even back then were the Mumbai Trans Harbour link (MTHL), the coastal road, the metro and NMIA, none of which were completed as per plan and are in various stages of execution even today. "A degree of stability at the bureaucratic level is necessary to pull off the numerous infrastructure projects — roads, highways, flyovers, metro et al — needed to make the new airport accessible for fliers," argues former EY partner Jayesh Desai, a resident of Worli. Unfortunately in India, "our planning and execution process almost makes us believe that ancillary projects are an afterthought" whereas in all successful large projects, ancillary projects are planned to come about in conjunction with the main project, he adds.

Why Confidence Remains Low

Despite the fact that construction activity at the site is on in full force and the runway is practically ready, aviation industry professionals, civil aviation ministry sources in Delhi and rival private airport staff have been skeptical about the completion of NMIA. Despite the development of the Mundra port and other infrastructure projects under its belt, sceptics point to the challenge the Adani Group faces in creating a greenfield airport of such scale and operation. Moreover, while Jewar (in Delhi) has the backing of Flughafen Zurich, one of Europe's best-known airport developers, Adanis have chosen to go it alone for NMIA.

The Adani Group, however, is giving the project top priority. CEO Sharma, who took charge of NMIA in April 2021, had been instrumental in building the Mundra port. Almost 70-75% of the team that was engaged in construction and development of MIAL is now handling the NMIA project.

Airlines have another worry though. Has AAHL bitten off more than it can chew? Besides taking over MIAL, which in itself is a large and complicated airport to operate, the group is now managing airports in Guwahati, Mangalore, Jaipur, Ahmedabad and Lucknow. While many of these are works in progress, improvements have been discernible at Ahmedabad airport, the home base for the group. At most of the other airports, small improvements have been made and in many, the retail experience has been worked upon. "There are more shops and food counters but airside and terminal side improvements are not yet discernible," says a senior civil aviation ministry source on condition of anonymity. At Mangalore airport, for instance, washrooms were the only clear giveaway that a private player was involved. The overall look and feel of the facility remains more like a public sector AAI-run airport as of now.

Regardless of doubts and concerns, the consensus in the sector is that India can no longer afford the wait on this one. The urgency to get the new airport up and running far outweighs all other concerns. Like a flight caught by any passenger, a much-needed second airport in the financial capital is better late than never.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.