Tamil Nadu Scraps US$2.86bn Parandur Airport, Seeks New Chennai Site

CHENNAI, INDIA — Tamil Nadu has abandoned the US$2.86bn plan to build Chennai's second airport at Parandur, setting aside a site that had already received in-principle approval from India's civil aviation ministry.

Chief Minister C. Joseph Vijay announced the decision in the state Assembly on Monday. The government will assess other locations where an airport would have less effect on agricultural land, homes, and local livelihoods, according to India's public broadcaster Akashvani.

Tamil Nadu has not dropped the requirement for another Chennai airport. It has dropped Parandur as the location, forcing the state to repeat site-selection and approval work while adding capacity at the existing Chennai International Airport (MAA).

An Approved Site Returns to the Starting Line

The previous state government selected Parandur in 2022 for a greenfield airport intended to relieve Chennai's existing gateway. The proposal covered about 5,320 acres and faced sustained opposition from residents concerned about the loss of agricultural land, displacement, and water bodies.

The project had progressed beyond a preliminary announcement. The Union Ministry of Civil Aviation granted site clearance on August 1, 2024, followed by in-principle approval on April 7, 2025 to the Tamil Nadu Industrial Development Corporation (TIDCO).

That approval was conditional. TIDCO still had to secure environmental and other statutory clearances, remove identified obstacles, and acquire land. The certificate called for at least 90% of the land needed for Phase 1 to be acquired by the concession award and required development to begin within five years or the approval would lapse.

Reuters placed the planned airport's total cost at Rs274bn (US$2.86bn). A separate parliamentary update put the estimated cost of Phase 1 at about Rs105bn.

Land acquisition was also underway. Local reporting in June said nearly 1,700 acres of private land had been acquired. Tamil Nadu has not yet detailed in the reviewed announcement what will happen to that land or the compensation already paid.

The available record therefore shows a project well beyond site selection but not yet cleared for construction. Any replacement must first pass a technical feasibility study. Under India's Greenfield Airports Policy, a developer then seeks site clearance followed by in-principle approval, while land acquisition, environmental review, financing, procurement, and licensing add further stages before operations can begin.

Chennai Expansion Becomes the Interim Plan

The state plans to work with the Airports Authority of India (AAI) on a fifth terminal at the existing airport. Vijay said the terminal and associated access works would eventually lift annual passenger capacity to 55 million.

The capacity figures need a distinction. Chennai airport does not currently handle 30 million passengers a year; it is designed to accommodate that number. AAI statistics show traffic of about 23 million passengers in the financial year ended March 2026.

AAI's current modernization program is intended to raise terminal capacity in steps. The first phase increased annual capacity from 23 million to 30 million, and Terminal 3 is intended to take the total to 35 million. The proposed Terminal 5 would supply the balance of the planned increase to 55 million.

No construction schedule for Terminal 5 appeared in the reviewed state announcement. That leaves the timing of the additional 20 million-passenger increment unresolved just as the second-airport timetable has been reset.

Terminal capacity is also only one part of the calculation. Chennai's two runways intersect, and the current aeronautical information publication lists approved peak capacity at 36 combined arrivals and departures an hour. Apron space, gates, road access, cargo facilities, and airline scheduling will determine how much of the higher terminal capacity can be used during peak periods.

Manufacturing and Cargo Keep the Pressure On

Tamil Nadu is a major base for automobile and electronics production, including operations connected with Hyundai, Renault, Foxconn, and Tata Electronics. That makes the airport decision more than a passenger-terminal issue: manufacturers and logistics companies also depend on reliable air-cargo capacity and international connectivity.

The Confederation of Indian Industry's southern region chairman, Ravichandran Purushothaman, told Reuters that the state should finalize and prioritize an alternative site quickly to support industrial, manufacturing, logistics, and service-sector growth.

Expanding the current airport can provide more terminal room while the site search continues. It does not reproduce the separate airfield, cargo, and development footprint envisioned at Parandur. The practical question is how long the existing airport can absorb traffic growth before constraints shift from terminal processing to runways, stands, cargo handling, or peak-hour airline schedules.

Vijay said expert teams would study the technical feasibility of alternative sites, but the announcement did not name the locations or set a deadline for selection. Until the state publishes that timetable and a funded Terminal 5 schedule, Chennai's capacity bridge remains a plan rather than a dated delivery sequence.