Govt to play limited role in upgrading airports

The contribution of the government in the ambitious airport modernisation project will only be in the form of real estate around airports as well as the existing assets.

The investments required for modernisation will have to be completely raised by the private sector consortium.

This stand of the government will not only be applicable to the metro and non metro airports, but also to the modernisation of the Delhi and Mumbai airports.

It is estimated that the airport infrastructure upgradation project could cost as much as Rs 40,000 crore, which the government wants to raise through a public-private partnership.

The government is however, open to allowing Indian financial institutions to participate in the project. In the case of the Delhi and Mumbai airports, the financial institutions will however be allowed only after the finalisation of the private sector partner in the project.

Besides, the government is also likely to allow private sector companies to raise funds from the market as well as through other market instruments.

"Development of airports requires very heavy investments. The company will be allowed to raise funds from the market as well through other mechanisms," said a senior Civil Aviation ministry official.

At present, the government is in the process of finalising the bid and offer document for the privatisation and modernisation of the Delhi and Mumbai airports. Besides, it has also invited bids to appoint a global technical advisor for the modernisation of the non metro airports.

The government is embarking on the development of airports with the aim to remove the capacity constraints resulting from growth in traffic and limited investments and to generate additional revenue from airports. Besides, the government is also looking at increasing non aeronautical revenues from airports.

The airport development strategy of the government includes improving the efficiency of airports, expanding aviation infrastructure and airport services capacity at select airports to international standards, inducting private sector participation at potential airports and establishing a level playing field for all participants.

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No interference

The investment required for modernisation will have to be completely raised by the private sector consortium

It is estimated that the airport infrastructure upgrade project could cost as much as Rs 40,000 crore

The government is open to allowing Indian financial institutions to participate in the project

In case of the Delhi and Mumbai airports, the financial institutions will however be allowed only after the finalisation of the private sector partner in the project