Airport upgrade scheme may get nod soon

The model concession agreement, which provides for sops to developers of airports, may only be finalised once the modalities of the modernisation of the Kolkata and Chennai airports are decided.

This is for the simple reason that the sops provided for these airports could be different from those given to the developers of the Delhi, Mumbai, Hyderabad and Bangalore airports.

State governments had till now been signing different agreements with companies for developing and building airports. They have been giving out varying concessions to the companies. The model concession agreement was proposed to bring uniformity in the sops granted to developers.

However, the civil aviation ministry is of the view that bringing in an agreement at this stage could lead to legal tangles as the companies executing the airport upgrade projects can also end up demanding the same," sources told Business Standard.

"At a recent airport modernisation review meeting by the Committee of Infrastructure, the civil aviation ministry argued that such an agreement cannot be struck immediately, as it would affect the modernisation plans of these airports," a government official added.

Private sector partners in airports projects are being given special fiscal incentives. These include 100 per cent income tax relief on profits for the first five years and a 30 per cent deduction for the next five years.

The government is planing to modernise about 50 airports in the country through public-private participation and upgrade airport infrastructure in the country at a cost of about Rs 40,000 crore.