Why Puri International Airport Is Not Taking Off

The first phase of Rs 2203 crore Odisha’s Puri International Airport, a public-private partnership initiative which was supposed to start five months ago is delayed for a number of reasons. First, it is learnt that the state government is yet to collate 221 acres of private land for the airport project. Second, the three potential bidders Adani Airports, Fairfax and GMR group, who first expressed serious interest in the project did not bid for it on June 4. Reason: It seems the airport’s business viability model is not clear to the investors. Upon checking the ground situation the bidders found that its business model did not guarantee handsome returns. Besides, sources say, for a greenfield international airport at Puri there are no base case traffic numbers to start with, so quantifying investment return for the Puri airport project is an issue. Also, bidders were not comfortable with the Puri competing with next door Biju Patnaik International Airport, Bhubaneshwar.  Aviation experts say traffic volume success lies in de-bottlenecking Bhubaneswar airport and progressively expanding passenger traffic at Puri airport to make it commercially viable. Contrary to this view, a source from the aviation sector said “A few days back the Union Civil Aviation Minister Kinjarapu Rammohan Naidu declined permission to build a new terminal at Bhubaneswar airport thereby indicating that they are keen to develop the Puri project.” Industry watchers say in spite of Lord Jagannath temple attraction there is no immediate commercial viability for two airports — Bhubaneswar-Puri — to co-exist within a distance of 60 km radius unless the Union government makes a provision for viability gap funding.