When the Indian authorities inaugurated a new airport in the small city of Hisar, the idea was to dream big. With an annual capacity planned for a couple of millions of passengers, the local government promoted the project as an alternative to the much more busy terminals that serve the nearby New Delhi. But several years after the opening ceremony, Hisar’s airport just works. The arrivals and exits are practically empty, and the stray dogs beet at ease on the track. The airport receives military airplanes and sporadically planes that transport politicians, but it is a residual activity. In an attempt to revitalize the airport, since 2021 subsidized commercial flights have been made from Hisar.
“Nothing has happened since its premiere,” explains Subham Nagpal, 43, owner of a store in a nearby market. The situation of Hisar airport is not an isolated case, it extends throughout India. Prime Minister Narendra Modi and his government have reinforced infrastructure in the world in the world in record time, investing billions in the expansion of roads and ports, and building dozens of new airports. However, India’s commitment to the improvement of connectivity has not always been up to the economic reality: the supply does not house with demand. Dozens of large projects are not obtaining the expected results, which evokes the problems that China had a while ago, when Beijing invested on roads, luxury floors and airports in cities devoid of population and commerce.
A dozen terminals did not receive a single passenger between December and March, which made them ghost airports, according to official aviation data. More than a third had an average of less than five daily flights during most of the last year, and some did not register any in certain days.
An adverse environment
The Indian authorities ask now if it was built too much and too quickly, and if the growth of the country is beginning to show signs of deterioration. Some sectors of the economy have staggered lately, as demonstrated by the recent fall of the local stock market, with a loss of joint capitalization of 1.3 billion dollars. While actions have been recovered in recent weeks, Indian’s GDP grows at a slower pace than in the past. Morgan Stanley and Goldman Sachs Group have reduced their forecasts to 6.1% for the current fiscal year. That is well below the growth of more than 9% in recent years.
The country’s clientele policy is an obstacle to Indian infrastructure challenges. Regional elected leaders are pressed to finance ostentatious projects to impress voters, even if the plans are poorly designed and the average cost is still too high for municipal coffers. An example of this: the main minister of Madhya Pradesh, one of the poorest states in the country, has promised to build an airport every 200 kilometers away.
“It is clear that India is not planning its aviation infrastructure based on the logic of traffic and demand, but on electoral and political agendas,” Mark Martin, executive director of Martin Consulting, a aviation consulting company, judges. “The way infrastructure is being developed in places where there is no industrial pole or a population need leads to wonder if someone is economically benefiting from these projects,” he adds. “That is the last thing India needs, given the exorbitant public debt and fiscal deficit.”
In the country’s megacities, the Metropolitan Railway System (Metro) offers a poor image. The number of passengers transported by the Mumbai suburban, for example, is 30% below its original objective, and the gap in Bengaluru is 6%. Without counting the cases of New Delhi and Calcutta, the real number of passengers who use the meter of all India is 20% lower than the budgeted figure. The official government auditor has assured that some projects were built years, or even decades, before they were necessary. Although the road network has grown spectacularly, sometimes legal disputes between private companies and the state construction company of India have delayed highway projects that connect overpopulated cities such as Ahmedabad.
The empty airports of India are perhaps the most representative example of the country’s construction problems. While air traffic has never been as high in India as currently, doubts about whether tax money are efficiently persists in places where passenger bottlenecks are more evident, for example metropolitan areas with high traffic such as Nueva Delhi and Bombay. “These airports face demand challenges and this will continue in the short term,” said Kapil Kaul, executive director and director of the Indian layer, a aviation consulting company.
The Airport Authority of India (AAI), a state group that manages 100 facilities throughout the country, did not respond to Bloomberg’s requests for information. In public statements and during the electoral campaign, Indian officials argued that airports are necessary to ensure a more prosperous future, even if they are currently underutilized. Since pandemic, the growth of air traffic in India has practically surpassed that of all other great economies. At present, the country is the third largest national market for air trips, after the United States and China. Modi and his party, the Bharatiya Janata Party, want to double the number of airports by 2047, the deadline that India has set to become a developed country.
On the occasion of an electoral rally held a few months ago, Modi landed at the Hisar airport and promoted the city as an example of the modernization of India. In April, the state airline Alliance Air began to offer limited flights between Hisar and New Delhi, although it is not clear how long they will last if the government stops subsidizing them. Local authorities are also considering offering economic hangars airlines for airplanes that wish to be close to New Delhi, which is less than 200 kilometers. While the beginning of some flights from Hisar by Alliance Air is promising, the facilities described have not always been profitable. The airline began flights to Pondicherry airport from Bengaluru in 2014, but suspended them six months later, according to local media.
There are precedents of the Indian strategy to build first and use later. A decade ago, China was also criticized for its “ineffective investment” in its so -called ghost cities. In response to rapid urbanization, the Chinese government financed many construction projects that resulted in a series of strange white elephants: empty apartments that sink into mud wells; wide and empty roads; and extravagant architectural works without an obvious function. However, some of China’s old ghost cities, such as those of the Pudong district, are not so bad today, especially those that were built to absorb the overflow of megalopolis such as Shanghai. It is still an unknown if the white elephants of India will become equally viable.
Bureaucratic hole
Logistics is more complex to resolve than in communist China. The chaotic democratic system of India often leads to bureaucratic stagnation. Ghost airports, for example, are usually located in small cities with landing clues that only admit passenger aircraft. In addition, compliance costs related to traffic safety and management are currently fixed throughout the sector, which means that regional airports and international airports with greater traffic pay practically the same, despite having very different balances. “It is difficult for any airport with smaller aircraft operations,” says VP Agrawal, former president of the AAI.
The current AAI officials have complained in deprivation of the growing number of deficit facilities. In a report to which Bloomberg had access, the AAI raised the possibility that the government offers financing to cover the viability deficit to airports with difficulties for another 10 to 15 years. Smaller airports require at least 8 to 10 daily commercial flights to recover their operational costs, according to an estimate of the AAI report. Half of the 140 AAI airports receive less than 10 daily flights, according to data from Bloomberg News. Government money is used to democratize trips for the 1.4 billion inhabitants of India, especially for those who live in remote areas of the interior. The additional budget is used for a program whose name means “letting common people fly.”
India has set the goal of launching subsidized flights to 120 new destinations. But Agrawal, who now works as an aviation consultant, believes that these measures may not be enough to reverse the situation of the ghost airports of India. Until the government adjusts compliance costs to reflect the size and scale of an airport – as occurs in the United States, for example – “India can never develop financially sustainable airports in smaller towns and cities,” he says.
In Hisar, the inhabitants were mostly happy with having an airport, although some flights are still missing. Prakash Chauhan, 40, who runs a nearby cafeteria, already has plans to open a larger restaurant once the traffic begins to flow through the terminals. “That will mean more business for us,” he says. In the Raj Guru market of Hisar, among Saris and sweet stores, many commented that the new infrastructure not only seeks to improve life in the city, but is a first step to attract foreign investment. Some compared it to the situation in Gurugram, an agricultural city near New Delhi that is now one of the main business centers in India and a magnet for multinationals.
Santosh Gundli, 40, anxious to undertake his first plane trip, remains importance to concerns on large -scale construction in the country. These projects, ultimately, seek to make a more prosperous India come true, he says, and that is a vision in which everyone in their circle is eager to believe. “Flights will be good for our future generations,” according to Gundli.
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