The Airports Authority of India (AAI), according to a senior civil aviation ministry official, has again sought permission from the finance ministry to raise Rs 5,000 crore through tax-free infrastructure bonds.
The money is for modernisation of airports.
This is the second time the state-run airport operator has approached the government with such a proposal.
The earlier proposal was turned down on the reasoning that buyers for these bonds were limited and allowing AAI would affect the plans of other government agencies.
So far, the National Highways Authority of India (NHAI) and Rural Electrification Corporation of India (REC) are the only two government agencies allowed to issue such tax-free bonds, known as 54EC bonds (after Section 54EC of the Income Tax Act, 1961). These are short-term bonds with a three-year maturity.
Under the income-tax law, one can save on payment of capital gains tax if the amount is used for repurchase of property within a 12-month period. Alternatively, capital gains tax can be avoided by investing in bonds issued by NHAI and REC.
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A senior AAI official said that in the new proposal, they had requested the government to give a go-ahead, as they would be raising the money only once, not annually like NHAI and REC.
In the current financial year, AAI plans to invest Rs 4,500 crore on modernisation of the various airports run by it. In contrast, it has received only Rs 85 crore for plan expenditure for the year from the government. However, it gets special funds to build airports in the northeastern part of the country.
Among the major investments are the upgrade works at Kolkata and Chennai airports.
Of the 128 airports AAI owns, only 14 make profit. The mini ratna company registered a profit of Rs 712 crore in 2009-10, on revenues of Rs 4,615 crore. The airport operator also expects its annual earnings to grow by Rs 100 crore through user development fee collection at various airports.
In a first, AAI started charging user development fees at Jaipur airport from January 1. It has already received permission to levy similar charges at Udaipur, Ahmedabad and Thiruvananthapuram airports.
AAI has now applied for permission to collect development fee at Amritsar, Mangalore, Varanasi, Visakhapatnam and Trichy airports.
The authority is also taking up the city-side development of Kolkata, Visakhapatnam, Bhubaneswar, Lucknow, Indore, Ahmedabad, Amritsar, Guwahati and Jaipur airports through public-private partnerships.