In a last ditch effort to save the Hindustan Aeronautics Ltd (HAL) airport in Bangalore from closure, the defence ministry has asked the civil aviation ministry to give domestic airlines the right to choose the airport to land at in Bangalore.
In a letter sent by defence minister Mulayam Singh Yadav to the Union minister for civil aviation, C M Ibrahim, the ministry has argued that domestic airlines should be allowed to choose between the existing HAL airport and the proposed Tata-Raytheon airport. This is to ensure that the HAL airport is not forced to close down or become unviable.
According to sources, the civil aviation ministry had earlier planned to allow only 50-seater aircraft to land at the HAL airport. However, following this letter, the decision has been left to the cabinet.
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HAL sources pointed out that any clause which prevented passenger planes from landing at the HAL airport would eventually result in its closure.
A HAL source pointed out that there are very few 50-seaters operating in the country, of which a negligible number land in Bangalore. The insignificant traffic flow would make the HAL airport unviable.
Around Rs 300-400 crore has been invested in the airport by the government, the Airport Authority of India (AAI) and HAL.
The private sector and the ministry were earlier proposing a clause in the contract that passenger planes will be allowed to land only at the Tata-Raytheon airport.
Sources point out that earlier HAL had objected to passenger planes landing at its airport. However, it now realises that the coming up of the Tata-Raytheon airport would make its existing facility unviable.
HAL now claims that it controls the air space in the region and will not allow its facility to be closed down.
The debt-equity ratio of the Rs 1213 crore project has been finalised at 1.5:1. The total debt component is Rs 723 crore and the equity component is Rs 490 crore.
The 1996 feasibility report had put the project cost at Rs 1200 crore which had to be revised owing to delays.
The Karnataka government is expected to contribute its equity by way of land. It is not yet known how the AAI will contribute its share of Rs 50 crore equity.