35 non-metro airports set for privatisation

The government today flagged off the process of privatisation of 35 non-metro airports across the country, even as it left out for now the Chennai and Kolkata airports from the overall modernisation exercise.

Civil aviation ministry officials said the plan for the non-metro airports envisaged a maximum foreign direct investment of 74 per cent and kept runways out of the ambit of privatisation.

Modernisation contracts for the airports will be handed over to joint ventures, which are to only take up terminal and city-side development.

In the model followed for the privatisation of the Delhi and Mumbai airports, FDI has been capped at 49 per cent, with runways too handed over to the private parties executing modernisation.

At the non-metro airports, however, the runways will be taken care of by the Airports Authority of India (AAI), which will also manage air traffic control.

The Union Cabinet had earlier given an in-principle approval to the privatisation and modernisation of these airports. The AAI will now prepare a blue-print for the exercise.

"We are taking up these 35 airports together as the domestic passenger traffic in the first quarter of 2006 has shown an increase of 49 per cent," Civil Aviation Minister Praful Patel said after a meeting of the Prime Minister's Committee on Infrastructure.

According to Patel, the development plans, partners for which would be decided through a competitive bidding process, would require an investment of over Rs 7,500 crore. The 35 airports would be taken up in one go, with tenders for the purpose to be issued shortly, he told reporters. The entire exercise would be completed by 2008-09.

Government sources said the AAI would be allowed to raise funds worth Rs 5,000 crore from the markets to finance the development plans.