Techno-Economic Viability and Technical Due Diligence in Airport Infrastructure Development

Mr. Nirmal G Humbad, Managing Director of Dorsch Consult India Pvt. Ltd, engages in a conversation with Homes India Magazine on the critical factors shaping the techno-economic viability of airport development projects. He emphasizes the delicate balance between economic feasibility and technical requirements, addressing challenges such as traffic demand, environmental sustainability, and stakeholder collaboration. Mr. Nirmal highlights the role of emerging technologies, like Digi Yatra and sustainable aviation fuel (SAF), in enhancing operational efficiency and mitigating risks. His expertise underscores how meticulous planning, robust due diligence, and sustainable practices can transform airports into engines of economic growth while meeting modern environmental standards.

What are the key factors to consider when conducting a techno-economic viability study for airport infrastructure development, and how do you balance economic feasibility with technical requirements? 

Implementing airport projects involves high capital expenditure and long gestation periods, requiring careful consideration of several key factors to ensure success. These include project connectivity, statutory approvals, land acquisition, resettlement and rehabilitation, demand-side project traffic, competing airports, availability of water and power, environmental impacts, airspace availability and interference, bird hazards, site topography and drainage, economic activities in the catchment area, aviation policy guidelines, and findings from obstacle limitation surface (OLS) surveys. Despite these challenges, airports drive significant economic development, generating benefits such as rising real estate values, employment opportunities, and improved transport connectivity. Financial viability is achieved through aeronautical and non-aeronautical revenues, but given the high capital costs, the involvement and perspectives of lenders are critical to securing investment and ensuring project success. 

In technical due diligence for airport projects, how do you identify and mitigate potential risks related to construction, operations, and future scalability? 

Lot of risks need to be addressed during feasibility of Greenfield airports. Due diligence of brown field or green field airports normally involve Traffic Risk, Financing Risks, Technical Risks, Political Risks, Connectivity Risks, Risks perceived by Investors, Time over run, Cost over run, Quality of construction, Covid like situation. One needs to address Regulator’s specific requirements. Lot of bench marking with global airports of similar size and capacity is carried out to identify and then address risks Lenders employ. Needless to add about Consultant’s own experience makes lot of difference.      

How do you incorporate sustainability and environmental considerations into the techno-economic viability of airport infrastructure projects, particularly in rapidly developing regions? 

Climate Change, Environmental Considerations and Sustainability measures are quite relevant to today’s airport construction. Flooding is one of the key considerations need to be addressed. Normally, Wet Infrastructure Master Plans are prepared. Impact on air quality is another key factor. Sustainable Aviation Fuel (SAF) and usage of it for limiting emissions. It starts from storage and then handling of SAF in modern airports. Various global certifications like LEED, WELL of GRIHA which recognize buildings and communities that meet certain standards for sustainable design and energy efficiency.  symbol of sustainability achievement are required to be met with.

What role does technology play in assessing the viability of airport infrastructure projects, and how can emerging technologies enhance both the feasibility study and the due diligence process? 

Airports is operation intensive business. Quality of Service during peak hour traffic is key and important. Technology plays an important role in meeting these requirements. Technologies like Digi Yatra has played significant role in dealing with peak hour traffic. Airports deploy host of technologies right from FIDS (Flight Information Display System), Access Control, BRS (Baggage Reconciliation System), Technologies used in Air Traffic Control Tower. At the same time, technology keeps changing fast. We strongly recommend use of technology in our Due Diligence Exercise. 

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How do you ensure effective collaboration between stakeholders, such as government agencies, construction firms, and financial institutions, during the techno-economic viability and due diligence phases of airport infrastructure development? 

Airport involves large number of stake holders like Airport Owner, Airlines, Air Traffic Control Agency, Various Concessionaires, Ground Handling Agencies, O&M staff, House Keeping, Security Agencies etc. We normally draw passenger traffic flow & Cargo Flow and identify issues or bottlenecks. And then address them on case to case basis.