News: PPP model for Indian metro airports
(TNN 10/06/2006) New Delhi - The government has adopted a politically-cautious, middle-path strategy to take forward its plans for developing airport infrastructure in the country. While it has approved modernisation of 35 non-metro airports by the Airports Authority of India (AAI), chances are that
Chennai and Kolkata may be developed in partnership with private players. There are indications that while the West Bengal government would prefer AAI to be the majority consortium partner, Tamil Nadu may be willing to have a private developer as the lead player. The decisions come even as the government is planning to take up the aviation policy with the Cabinet this month and the Aviation Regulator Bill in the next session of Parliament.
Speaking to reporters after the Prime Minister’s infrastructure committee meeting, civil aviation minister Praful Patel said, “The government will consult West Bengal and Tamil Nadu governments on the ‘way forward’ to modernise the Kolkata and Chennai airports on a priority basis in the forthcoming three months.”
The government is exploring possibilities of setting up a small group to study the various models of modernising the other two metro airports.Modernisation of 35 non-metro airports would also be taken up in one go, and tenders for the purpose would be issued shortly, he said.
The development of the airports, which would involve an estimated Rs 40,000 crore, would be completed by 2008-09. “We are taking up these (35) airports together as the domestic passenger traffic in the first quarter of 2006 has shown a whopping increase of 49%,” Patel said. While AAI will be responsible for the development of all the aeronautical services in the airports, the government has allowed the city-side development to be carried out on a private-public partnership basis.
AAI could involve private players for putting up hotels, parking lots and cargo handling systems in place on a PPP basis, a senior government official said.AAI will be funding most of the cost of modernising the airports from internal resources and borrowings. AAI hopes to rake in its high earnings from the metro airport operations to fund the modernisation of the airports.
However, if the states required a higher degree of modernisation, the viability gap funding could come in as a possible mechanism to meet part of the restructuring cost.
Chennai and Kolkata may be developed in partnership with private players. There are indications that while the West Bengal government would prefer AAI to be the majority consortium partner, Tamil Nadu may be willing to have a private developer as the lead player. The decisions come even as the government is planning to take up the aviation policy with the Cabinet this month and the Aviation Regulator Bill in the next session of Parliament.
Speaking to reporters after the Prime Minister’s infrastructure committee meeting, civil aviation minister Praful Patel said, “The government will consult West Bengal and Tamil Nadu governments on the ‘way forward’ to modernise the Kolkata and Chennai airports on a priority basis in the forthcoming three months.”
The government is exploring possibilities of setting up a small group to study the various models of modernising the other two metro airports.Modernisation of 35 non-metro airports would also be taken up in one go, and tenders for the purpose would be issued shortly, he said.
The development of the airports, which would involve an estimated Rs 40,000 crore, would be completed by 2008-09. “We are taking up these (35) airports together as the domestic passenger traffic in the first quarter of 2006 has shown a whopping increase of 49%,” Patel said. While AAI will be responsible for the development of all the aeronautical services in the airports, the government has allowed the city-side development to be carried out on a private-public partnership basis.
AAI could involve private players for putting up hotels, parking lots and cargo handling systems in place on a PPP basis, a senior government official said.AAI will be funding most of the cost of modernising the airports from internal resources and borrowings. AAI hopes to rake in its high earnings from the metro airport operations to fund the modernisation of the airports.
However, if the states required a higher degree of modernisation, the viability gap funding could come in as a possible mechanism to meet part of the restructuring cost.
posted by InCar Group Press Room at 14:55
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