How A Second Airport In Chennai Would Boost Realty

Last month, Airports Authority of India (AAI) Chairman Guruprasad Mohapatra told media that Chennai badly needed a second airport if the city wanted to avoid a Mumbai-like air jam. It certainly does, data show.

According to Centre for Asia Pacific Aviation (CAPA), an aviation think-tank, Chennai handled 18.4 million passengers in 2016, and is expected to reach its maximum capacity of 23-26 by 2020, if traffic grows at an estimated rate of 12.5 per cent. The CAPA adds that while there are plans to expand capacity to 30 million passengers per year at the Chennai airport, airside constraints could pose a big challenge.

If all goes according to the plan, the Tamil Nadu capital may have a second airport by 2030-35. AAI officials have held two meetings with the Tamil Nadu government in the last three months to discuss the matter. The estimated cost of the new airport, says CAPA, could be $500 million.

"Eighteen months back, we were handling 28 movements per hour (at Chennai) and after making improvements in our air navigation system, we hope to reach 40. With this, we expect we will be managing Chennai till 2030 or 2035. But a city like Chennai will definitely require a second airport thereafter," Mohapatra said. It is relevant to note here that the AAI upgraded the city airport in 2013 at an estimated cost of Rs 2,000 crore.

Earlier, a report in The Hindu said areas near Walajabad and Madhurantakam in the Kancheepuram district and Alamathy and Gummidipoondi in the Tiruvallur district could be the possible sites for the development of a new airport.

Walajabad is a panchayat town and houses offices of many companies such as Apollo Tyres, Asian Paints Limited, Toyota Tsusho , Axon Technologies, Daimler Commercial vehicles, Global Automotive Research Centre, JCBL Marrel Tippers, Enfield and Renault Nissan.

Madurantakam is a town and a municipality in the Kancheepuram district. It is located 77.9 kilometers south of Chennai, and is famous for housing the second-largest lake in Tamil Nadu.

Gummidipundi is an industrial area near the National Highway-5 that connects Chennai to Kolkata. It lies 48 km away from Chennai.

About a decade back, the state government had announced plans to develop a new airport at Sriperumbudur -- that plan did not take off.

“After the initial announcement, not much happened with the project and in the meantime, there have been a lot of development in the areas. Also, the available land is not together. The land available now are few and far between. It will be extremely difficult to acquire the remaining land," the report in The Hindu quoted AAI officials as saying.  The cost of land in the area has gone up significantly since, and it may not be feasible for the government to develop an airport here.

The new airport, which is likely to have international operations, may also pose the need to put in place a high-speed rail corridor. This corridor will be instrumental in transiting passengers, if the new airport is located 40-50 km away from the main city.

A decision has yet to be taken whether the second airport would be developed on a public-private- partnership model or whether it would be developed by the AAI.

How does this impact Chennai real estate?

Apart from easing air traffic, a second airport will help Chennai in several other ways, too. Chennai real estate, for instance, would greatly benefit from the arrival of a new airport, as has been the case with other cities where plans to develop new airports have been unveiled.

Rates of property in Jewar in the national capital region, for instance, started increasing as soon as the site joined the race to get the region's second airport. The same is true of Navi Mumbai.  Why look elsewhere? A look at price appreciation in Sriperumbudur would easily establish the point. Despite the fact that this locality lies about 40 km away from the city, average rate of property in the area stands at Rs 2,800 per square foot.