HT Spotlight | Better air connectivity makes business fly high in Chandigarh, Mohali
The fast growing international airport has given wings to a host of businesses, including the IT sector, which has seen a record growth of 800% in the last decade. HT checks out the tangible and not-so-tangible economic benefits of air connectivity.punjab Updated: Jul 12, 2017 23:17 IST
The Chandigarh international airport has not only brought a smile to frequent travelers, it’s also giving a big push to economic activity in the region with its software exports soaring from 423 crore in 2005 to 3,878 crore in 2016-2017. Be it the IT sector, the hospitality industry, academia, ancillary services or the realty, these are all benefiting from the virtuous cycle set in motion by the improvement in domestic and international connectivity.
It was early 2000 when Chandigarh started making forays into the Information Technology (IT) business. Then tourism and IT director Vivek Atray, who was spearheading this move, recalls how poor air connectivity would often become a stumbling block during his talks with IT companies in Hyderabad, Bengaluru and other places.
“They would often raise the issue of poor air connectivity and ask us how their clients abroad would make their way here when they themselves found it difficult to reach Chandigarh,” he recounts.
Despite the initial hiccups, business travelers began reaching Chandigarh especially after Infosys agreed to set up a unit here, even though the local airport had just a single flight to Delhi. “As the number of travelers increased, the number of flights also went up and more companies began to settle here. The rest is history,” Atray smiles.
Software Technology Park of India’s additional director at Mohali,. Ajay Prasad Shrivastava, says there is no doubt that the growth of IT sector in Chandigarh and Mohali coincided with the expansion of air connectivity as it eased travel for domestic and foreign clients.
As per the latest figures of STPI, the tricity’s software exports touched almost 3,878 crore in 2016-2017, up from 7.7 crore in 1998-99. The industry hopes to double these in the next five to seven years and generate immense employment opportunities.
The Mohali Industrial Association president, Sanjeev Vashist, says great connectivity coupled with a stellar quality of life in the tricity is a big draw. “Wait for the day when the city gets direct flights to London, New York or Sydney. You won’t be able to imagine the impact on IT trade and other businesses,” he gushes.
The rich spread
From industrial parks to hotels, the area around the airport has already started looking prosperous. As per industrial projections, at least 5,000 acres of land is under development in the airport’s vicinity. Chandigarh international airport chief executive officer Suneel Dutt said business always gets a boost wherever aviation sector develops. “The result is already visible here with Chandigarh-Dubai connectivity; companies from both sides are traveling frequently between the two points,” he said.
Major hospitality chains are also showing an interest in the area. The Carlson Rezidor Hotel Group, for instance, is building a luxury hotel on the premises of the under-construction Bestech Square Mall on the way to the airport from Chandigarh. The 600-crore project will be ready by the end of next year. “It will be our first Radisson RED hotel in Mohali under a strategic partnership with Bestech Group,” said a company official.
Then prominent global trade facilitators, World Trade Center Association (WTCA) is coming up with its new signature venture World Trade Center in Mohali’s aero city. The project spanning a massive 1 million sq ft will host office spaces, auditoriums, retail spaces, studio apartments, food courts, retail plaza, banquet halls, multiplexes and a lot more
Cheers for F&B biz
The airport expansion is also seeing a rise of several new businesses such as food and beverages (F&B) and transport business. Then F&B business has reportedly seen a growth of 20%-25% due to the increase in air traffic. It’s ditto for local cab operators.
Several agencies from the tricity, for instance, have now applied for a licence from the Airport Authority of India to set up special kitchens meant to prepare food for airlines. G S Virk, owner of Park Plaza in Zirakpur, said their in-flight kitchen is in the final stage of completion and once it is operational, they will start trading with airlines.”So far airlines are sourcing their food from local sources. They start doing it once licensed vendors start their kitchens,” said an airport official.
Karan Dhillion, whose company owns a mall in Manimajra, however, cautions that the airport is still not growing as per the expectations of the local industry. “We need more flights to international destinations, especially where NRI population is settled,” he says.
Foreign flights boost desi realty
Real estate projects in the vicinity of the airport are the bright spots in the otherwise gloomy real estate scene in the tricity. The start of international flights from the airport proved the spark needed to rekindle a business that had almost gone into hibernation.
Greater Mohali Area Development Authority (GMADA) was among the first to benefit from the airport’s upgradation. Before the airport went international, GMADA’s IT city near the new airport terminal had seen a whopping 325 allottees surrendering their plots. But the demand for the project changed dramatically last year with the announcement of the international flights. GMADA received 14,000 applications for the allotment of 750 residential plots in the IT City. Ravi Bhagat, chief administrator, GMADA, says, “The airport has benefited both the private and public sectors in the area. We see it as a very promising location for both residential and commercial properties. We are planning to further develop projects here.”
In stark contrast to the airport area, realty sector in other parts of the tricity is struggling with price corrections and low demand. Kulwant Singh, president of Confederation of Real Estate Developers’ Association, Punjab, and managing director, JLPL, says, “The impact of the international airport is positive on both the housing and commercial segments in locations adjacent to the airport in Mohali. While in most parts of the tricity, there has been a big slump in the realty sector, here price appreciation started with the announcement of international flights. Though demonetisation halted the price rise, there is again a consistent increase in demand and prices. In the near future we will see a rise in the number of hospitality and residential projects in the area.”
For some though, the airport is yet to deliver the expected dividends. D S Benipal, former chairman of Mohali Property Consultant Association, says, “The demand for housing and commercial spaces in the area will pick up only when they start international flights to Canada, Australia and England. NRI investors from these countries can boost realty investments here. At present, the NRI visitor, taking flight either from Amritsar or Delhi, is not fully aware about the realty potential and developments in the area.”
Shot for medical tourism
Sandeep Dogra, senior vice president at Max Super Specialty Hospital, Mohali, is hopeful that a fully operational international airport will boost medical tourism in the tricity. Many Punjabis have migrated abroad but they prefer the health services offered at home. He said once the airport starts offering more destinations overseas, NRIs will be able to get tests or treatments done in Mohali and fly home the same day or a day later. This will save them the cost of treatment abroad.
What they say
“Mohali is turning into an attractive market for us due to its air connectivity and host of commercial and infrastructural developments. The new airport will become the gateway for a host of opportunities,” said KB Kachru, chairman emeritus, Carlson Rezidor Hotel Group, South Asia.
“It is high time the Punjab government and UT develop specific tourism corridors given the fact that we have Anandpur Sahib, Chandigarh and many other iconic places in the airport’s periphery,” chairman of the PHD Chamber of Commerce (Punjab), RS Sachdeva, said.
“IT industry and airport complement each other since foreign clients prefer to have clear connectivity with the area where they do business. All we need now is civic development in the areas developing as IT hubs,” Xeam Ventures director Anil Khurana said.
“If the airport blossoms to its full potential, the IT city coming up in its proximity will be the direct beneficiary as it will make travel easier between local companies and their offshore clients,” Mohali IT City Companies Association president Raman Aggarwal said.
“International flights from the region are a shot in the arm for the industry. Improved connectivity with the rest of the world will help attract investments besides improving business linkages. It will also give a fillip to industry such as tourism, IT, IT-enabled services in the region,” Babu Khan, CII Northern Region regional director, said.