MUMBAI (AFP).- Mumbai unveiled its long-awaited new airport terminal Friday, complete with a peacock-inspired design and huge art display, part of a lavish $2-billion revamp that aims to challenge India's reputation for shoddy infrastructure.

Prime Minister Manmohan Singh inaugurated the new gateway to the financial capital, described by the head of the project as the "mother of all challenges", partly owing to constraints on the land from the surrounding tightly packed slums.

Set to operate international and domestic flights, the terminal features 140 immigration counters, 94 security checking stations, India's biggest car park and a new six-lane elevated road to ease access to the facility in the congested city.

It also boasts India's largest public art programme, bidding to become the most visited museum in the world, with a three-kilometre-long display of 7,000 art works, Bollywood murals and even a wall plastered with cow dung.

Singh said the terminal was "expected to establish new global benchmarks" for airports.

"It also exemplifies our ability as a nation to build world-class infrastructure," said the premier, whose embattled ruling Congress party is seeking to highlight its achievements ahead of national elections due by May.

A vast improvement on its crowded, shabby predecessor, the terminal has been years in the making and illustrates some of the difficulties in executing megaprojects in India.

It had been due for completion in 2012, part of an airport overhaul that has ballooned in cost from 98 billion rupees ($1.58 billion) to 125 billion rupees.

Unable to shift tens of thousands of shanties on the airport land area, developers only had 1,400 acres (570 hectares) for use, leading them to create the X-shaped, "vertical" new terminal across four floors to best exploit space.

Most slum-dwellers on the airport site, their tin-roofed homes a stark contrast to the grand new edifice, refused to move because relocation conditions were "not clear", said Jockin Arputham, president of the National Slum Dwellers Federation.

Disputes over relocation of a politically charged statue of a 17th century warrior king also led to a 17-month delay, and -- perhaps the biggest challenge -- the terminal had to be built on the existing airport site while full flight operations continued.

"When we won the project, it looked impossible," said G.V. Sanjay Reddy, managing director of Mumbai International Airport Pvt. Ltd and vice-chairman of GVK Power and Infrastructure, the Indian company leading the airport's operations and revamp.

"Infrastructure projects in India are complex -- it's only a question of degree of complexity," he said.

The terminal's design has focused on Indian identity, from its hundreds of lotus flower chandeliers to the check-in floor's 272 sky-lights, with special lenses that move according to the sun to create reflections on the floor like feathers of a peacock, the national bird.

"This airport is not really targeted towards foreign travellers, it's targeted towards Indians," Reddy told reporters this week over lunch by a baggage reclaim carousel, as giant wind-chimes tinkled above.

"People have really forgotten what it means to be Indian."

While the terminal has capacity for 40 million passengers a year, there are concerns over future strains on Mumbai's aviation growth given lack of space in the densely populated city where over half of the inhabitants live in slums.

Kapil Kaul, South Asia head of aviation consulting firm CAPA, described the terminal as "an iconic addition to the aviation landscape", but said the airport would become "air-locked" in a few years, reaching its maximum number of flights.

Improving India's notoriously creaking infrastructure, from its ramshackle roads and railways to its unreliable power supply, is seen as key to boosting slowing growth.

India is due to become the world's third-largest aviation market after the United States and China by 2020, handling 337 million domestic and 84 million international passengers, the government says.

© 1994-2014 Agence France-Presse