The Hindu Business Line : Panel nod for modernisation of 35 non-metro airports

Project model
All aeronautical activities at these airports would be handled by the AAI.
Public-private partnership model would be followed for non-aeronautical activities at the city side of these airports.

MODERNISATION PUSH: The Civil Aviation Minister, Mr Praful Patel, and the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, in the Capital on Thursday. — Ramesh Sharma

New Delhi , June 8

The Prime Minister's Committee on Infrastructure has given its in-principle approval for modernisation of 35 non-metro airports including at least seven in the South.

Briefing newspersons after the Committee meeting, the Minister for Civil Aviation, Mr Praful Patel, said all aeronautical activities at these airports would be handled by the Airports Authority of India (AAI) while a public-private partnership (PPP) model would be followed for the development of non-aeronautical activities at city side of these airports. The PPP model is likely to peg the foreign direct investment (FDI) levels at 49 per cent with the private sector partner being allowed to pick up 74 per cent equity in the project.

Sources indicated the non-aeronautical activities that are likely to be allowed at these airports include putting up of hotels, restaurants, parking lots, cargo-handling facilities and other tourism-related activities.

Unlike in Delhi and Mumbai airports where the joint venture partner is looking after the development of the entire airport, while aeronautical facilities are looked after by the AAI, in the case of non-metro airports, the PPP partner would look after the development of non-aeronautical activities at the city side.

During the meeting, it was made clear that the AAI would not seek any budgetary support for the modernisation process that is expected to cost between Rs 7,000 and 8,000 crore.

"The modernisation process will start soon and we hope to complete it by 2008-09. The funds required would be garnered from the internal resources of the AAI. We could also look at coming out with bonds at a later stage," Mr Patel said.

At today's meeting, the issue of whether the Government would offer a sovereign guarantee for the bonds was not taken up, sources indicated.

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