Air cargo terminals Striving for PPP boost

The growth of the air cargo sector, which has a significant impact on the economic development of the country, makes the need to upgrade the infrastructure a major point of worry. The government took an initiative towards the development of the airport infrastructure through an announcement in the 12th Five Year Plan (2012-17) that an investment worth Rs 65,000 crore has been envisaged at Indian airports, out of which a contribution of about Rs 50,000 crore has been estimated to come from the private sector; airports have begun beefing up cargo throughput on the basis of the PPP (public private partnership) mode. The government’s support along with the contribution of the private sector will help with enhancing the airport infrastructure. Air cargo handling is a niche area in airport operation which requires involvement of professional dedicated agencies and handlers. Aided by government policies, they are bringing in reputed cargo handlers through global tenders to develop and create world class cargo terminal and services. To nurture the growth of air cargo in the country, airport infrastructure needed major consideration to improve with more dedicated cargo terminals. Privatization of airports was leading to massive infrastructure upgradation. Private ground handling and terminal operator companies were geared to further strengthen the air cargo infrastructure. However, the Airports Authority of India (AAI) has always remained the custodian for the infrastructure development at the airports. AAI – The Government Aid The Airports Authority of India has made elaborate plans for the upgradation of cargo terminals at all the major and regional airports. The Authority will convert redundant passenger terminals at 24 airports into cargo terminals. AAI is selling the ‘regional airport’ concept whereby the capital and commercial cities in the states where infrastructure is now improved, would be exploited under the regional airport concept to provide for Hub & Node types of airport operations. In this direction, AAI has decided to undertake domestic cargo handling at metro/non-metro airports in a phased manner (including by modifying the old/redundant PAX Terminals at non-metro airports) so as to improve the existing infrastructure by introducing Common User Domestic Cargo Terminal at the airports. Increasing Role of Private Hands The government’s initiatives towards enhancing the airport infrastructure has resulted in several private players venturing into the business of upgradation and development of air cargo terminals in India. The two major players who have been contributing towards this are Cargo Service Centre and Celebi. Cargo Service Centre (CSC) is well-equipped to play a vital role in the changing dynamics of air cargo handling. And this became very clear when it won the concession from Delhi airport to design, develop, manage and operate a Greenfield air cargo terminal project at Delhi airport through a global tender. In April 2012, the centre started its cargo operations from Delhi airport with its first customer Hercules Aviation. The Greenfield cargo terminal will be implemented through a joint venture company, Delhi Cargo Service Centre – with CSC owning 74 per cent stake and DIAL owning 26 per cent. The project consists of two terminals built over a plot of 48,000 sq m and 28,500 sq m respectively. Both the terminals when completed will have an annual handling capacity of 1.25 million tonnes. The larger terminal CT2 will be built in phases - the first phase is nearly completed with a capacity of 125,000 tonnes. When completed fully in 2017, it will be a state-of-the-art facility, with a high degree of automation, well-equipped to handle all types of cargo – general, perishable, express, valuable and dangerous goods as well as live animals for both international and domestic sectors under an integrated terminal concept. Under its airport services business, CSC offers air cargo handling services like physical, document, security as well as special cargo handling (Dangerous goods, valuables, livestock) to a number of major national and international airlines. Having critically acclaimed experience in managing the Perishable and Temperature Sensitive Products (PTSP) for over 16 years, CSC is the most reliable cool chain manager. CSC offers management contract solutions in warehousing, inventory management, packaging and re-packaging and value added offerings. To reiterate its successful journey, Radharamanan Panicker, Group CEO, Cargo Service Center said, “While most of the efforts of the airport developers are towards development of passenger terminal infrastructure, high level of investments are needed to upgrade and develop better cargo infrastructure to replace the creaking and inadequate cargo terminals. Understanding the growing exigencies of air cargo infrastructure for smoother operating module, it is our privilege that our Greenfield Air cargo terminal project will herald a new beginning in the country’s air cargo handling and will give a major boost to the development of Delhi as an air cargo hub.” Another major player Celebi got the license for developing, modernizing, financing and operating the existing cargo terminal at IGI Airport in New Delhi for 25 years and took over management of the cargo terminal in November 2009. The operations started in June 2010.Rajesh Goel, CEO, Celebi Delhi Cargo Terminal Management, said, “Celebi, which enjoys monopoly rights of cargo handling in Delhi at present, is working to completely modernize facilities with addition of automated systems, efficient equipment and systematic storage. Delhi airport's cargo handling capacity is set to witness a major jump with the total overhauling of its existing infrastructure.” Betting big on India's economic growth and burgeoning civil aviation sector, Celebi Holding, announced plans to invest up to $100 million in ground-handling and cargo operations in India over the next two years. It has already invested $30.2 million in the country -13.2 million at Delhi’s Indira Gandhi International Airport and $17 million at Mumbai’s Chhattrapati Shivaji International Airport. During the past two years, Celebi Delhi Cargo Terminal has witnessed many challenges such as a surge in volumes, implementation of new Customs system version 1.5, changes in regulatory processes like 100 percent screening of cargo, establishing bonded area as a sterile zone in exports, in addition to the normal challenges being faced while renovating a running terminal but overall the experience has been very motivating for us to proceed further with the same enthusiasm and vigor. “As a part of our development plan, we have planned a complete redevelopment of the existing infrastructure. But now an investment of $50 million has been put in to transform the air-cargo terminal into a world-class state of the art facility to meet future business demands,” added Goel. India is ideally positioned to stake its claim to this position because of its unique geographical location and ideal position between Asia and Europe. Working on these lines, Delhi airport, a joint venture led by GMR Group, is poised for big cargo growth despite the decline in the economy. Delhi airport has chalked out plans to transform itself into a cargo gateway of India. IGIA is projected to cross one million tonnes of cargo handling by 2017. The airport has a strong network of 51 international, eight domestic airlines and 12 freighters. Sanjiv Edward, Associate Vice President – Commercial at Delhi International Airport Limited (DIAL), said, “The refurbishment work at Brownfield Terminal has been completed which happened in different phases, including export and import warehouses. The current capacity has been enhanced to accommodate future growth.” Even Mumbai airport has put in significant investments in import cold storage facilities over the last three years and currently provides a one-time holding capacity of 426 metric tonnes. The pharma sector in Mumbai, according to Manoj Singh, Vice President – Cargo, Mumbai airport, is a growing business. “To meet this demand, MIAL is constructing a state-of-the-art perishable facility in imports with five level racking systems and one-time holding capacity of 750 metric tonnes. The upcoming facility will cater to +15 to +25 degree products and will be equipped with high level automation and temperature recording systems.” Sector specific terminals Some developments are being taken specifically to a particular sector like pharmaceuticals. For instance, Rajiv Gandhi International Airport (RGIA) at Hyderabad which flaunts a world-class cargo terminal is beefing up cargo throughput, especially pharmaceuticals, and aims to generate more than 20 percent of its revenues from cargo. The modular integrated cargo facility at the airport is spread over 14,330 sq m with a capacity to handle 150,000 million tonnes annually, which is expandable. The cargo terminal at the airport has integrated cargo facility, housing both domestic and international facilities under one roof. Hemanth D P, Chief Operating Officer – GMR Hyderabad International Airport, said, “To support the growing local industry which now has strong global footprints, we as business enablers need to extend efficient temperature controlled care while handling pharmaceutical products. This first-of-its-kind facility with a capability to handle 33,000 million tonnes of cargo was commissioned with truck dock to airside temperature controlled facility to maintain cool chain integrity at global standards.” The airports across the country are gradually coming out of this situation and is beefing up cargo throughput through different sectors – be it pharmaceuticals, automotive or manufacturing. However, running the airport’s cargo operations smoothly and efficiently without hiccups, is indeed a task. Smart thinking and relentless focus on implementation with the government’s support and contribution of the private hands can bring rich rewards in airport infrastructure. n