Saturday, March 29, 2008

New airport set to fuel development

New airport set to fuel development
The new international airport will see rapid commercial growth and development in its vicinity, says
Deepti Ganapathy

When the Rs 2,470 crore Bangalore's int e r n at i o n a l airport formally opens up its 4,000-metre runway next month, it will accommodate an initial capacity of 11 million passengers. The 71,000 sqft terminal has the capacity to handle over 2,733 passengers at peak time.
The airport, the second of the major public-private partnerships in airports, has been built by Bangalore International Airport Ltd (BIAL) with Siemens, Zurich Airport, Larsen & Toubro, the Airports Authority of India and the Karnataka State Industrial Development Corporation as equity partners. Its passenger handling capacity is expected to go up to 18 million by 2020.
In its first phase, the airport will have a cargo capacity of 1.4 lakh tonnes per year. There are plans to have a Cargo Village for cargo handling. The HAL airport currently handles over one lakh tonnes of cargo annually and is seeing an annual growth rate of 24 percent. BIAL officials say that the new airport will have a capacity to handle 3.5 lakh tonnes of cargo annually. This huge amount of cargo handling will make it imperative for BIAL to have a large cargo village near the airport soon, say the officials.
With the globalisation here to stay, international markets will become more closely integrated necessitating the need for world trade across foreign routes to synchronise global commerce. This is only the start of the process for the air cargo industry.
Air cargo, while accounting for only two percent of transportation of goods by weight, accounts for more than 40 percent by value. The growth for dedicated air freight service, as projected by an Airbus Industries survey, is expected to go up from the present eight to 165 services a day by 2026. Going by the demand surge for air cargo service, the civil aviation ministry itself has estimated the country's need for dedicated cargo planes to touch 500 in 10 years; time.
Setting up of a cargo village at the Bangalore international airport will have a significant positive impact on the overall development of Bangalore. Take the case of Memphis airport which is the world's busiest cargo airport (Fedex's Cargo Hub) that helped the region's economy. With the establishment of a Cargo Village, Bangalore can become a gateway to South India's markets. This will span ancillary industries that cater to the needs of the Cargo Village (conveyors, trucks, refrigeration, warehousing equipment) and can generate employment for many.
Setting up a cargo village will facilitate setting up of regional offices of courier and supply chain companies in Bangalore. Railway and road transport businesses will also significantly increase due to the presence of the Cargo Village in Bangalore. Smooth cargo operations needs world class infrastructure facilities.
The BIAL will shape a business location and urban development like never before.
The new airport will entail much more than runways and terminals. It will have lot of action nearby and around it - with business growing and enough land available to accommodate industrial cargo facilities, and commercial and residential spaces.
City planners swear by the fact that airports act as magnets for development and are a clear centre of urban growth. BIAL is now spurring some of the largest developments in that area.
Property demand set to go up
The region around an international airport automatically starts growing with business establishments. From business parks, hotels, residential units and entertainment areas - a cluster of airport-linked businesses will begin to form along corridors in a radius of 25 km. This economic impact will be significant.
Aviation and airports are highly regulated businesses operating in a challenging planning environment. Airports hold very large capital assets in both core aviation and non-core land and buildings. The hospitality industry in particular starts gravitating towards the airport to meet the demand of travellers to stay, owing to the considerable distance from the city area.
Companies that are increasingly reliant on air travel to move people and goods quickly in this global economy will start locating nearby. When thousands of jobs are created, new homes follow. With shopping at airports becoming more competitive than at the malls, airports are recreating the atmosphere of downtowns by opening shopping malls, food courts and conference centres.
With older airports running out of space, Bangalore's new airport is going to be a major aviation hub. The demand for residential property in Devanahalli is likely to shoot up in the very near future, feel industry watchers. A direct metro link will further improve accessibility.


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