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The Centre has set new criterion that a minimum population size of 1 mn would be the basis for selection of towns where new airports would be constructed
The Union finance ministry's insistence on a certain minimum rate of return is a barrier for the project of building a number of low-cost airports.
The Public Investment Board of the finance ministry will appraise only those projects with an internal rate of return (IRR) of at least 12 per cent.
According to an official of the Airports Authority of India (AAI), none of the 50 low-cost airports sought to be built in the initial phase can meet the requirement.
Business Standard had reported last week that the present government had put on hold its predecessor's plan on these airports due to a problem of feasibility.
Sources said AAI had written to the Union finance ministry to relax the norms but this hadn't been accepted.
"We will conduct a techno-feasibility study on these airports and soon appoint a consultant for finding (a way forward) on viability of the projects," said the AAI official cited above.
"Airports in metros give more return than those built in remote parts. By reducing the capital cost and the ongoing operational cost, one can meet the IRR norms," said another.
Of the 50 sites identified by the then government in 2013 for development of such airorts, work will proceed on five - in Karnataka, Rajasthan, Arunachal Pradesh and Odisha - where construction has already been sanctioned. In many other cases, the government had given approval to states in writing and even completed the land acquisition process. States were to make available free or cheap land, roads and power for the development of these airports. The cost of building each airport was to be Rs 100-150 crore.
The Centre has set new criterion that a minimum population size of one million would be the basis for selection of towns where new airports would be constructed.
The previous government had in June 2013 decided to build low-cost airports at 50 cities and towns, in Assam, Jharkhand, Bihar, Punjab, Uttar Pradesh, Arunachal Pradesh, Rajasthan and Maharashtra. This was aimed at enhancing connectivity in regional and remote areas.
The present government at the Centre had during 2014-15 started work on five of these proposed airports - at Hubbali (earlier Hubli) and Belagavi (earlier Belgaum) in Karnataka, Kishangarh in Rajasthan, Jharsuguda in Odisha and Tezu in Arunachal Pradesh.
