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Government gives green signal to corporate airports

The Union Cabinet on Thursday gave the go-ahead for the corporatisation of the Delhi, Bombay, Calcutta, Madras and Bangalore airports to bring them up to world-class standards.

Civil Aviation Minister Ananth Kumar said global consultants, who will go into the financial and legal structuring of corporatisation, will be decided within four months and the whole process of corporatisation will be completed within a year, at the earliest.

''Once we corporatise, each airport corporation will become a special entity under the Company Act, 1996 opening up tremendous scope for foreign investment and joint consortium participation,'' Kumar said.

The Cabinet said it had decided ''in principle'' for the corporatisation following the recommendation of the taskforce on infrastructure set up last year under the deputy chairman of the Planning Commission.

Kumar said ''after shortlisting and identifying the global consultant, the consultant will give the proposed financial and management structure which would then again be put before the Cabinet. This is a major step taken by the government''.

Kumar said the project cost of each airport would be more than Rs 30 billion. At least $ 4 billion will be spent on the five airports, he said, adding that the aim was to bring them to the international standards of Changi in Singapore or Schipol in Amsterdam.

He said even as the corporatisation proposal was with the Cabinet, the Airports Authority of India had advertised for global consultants. It has been made mandatory that the global consultant would be required to have a tie-up with an Indian consultant.

The taskforce on infrastructure was set up following the announcement by the prime minister on October 24, during the 71st session of the FICCI, that five international world class airports will be built in India.

He said the corporatisation will liberalise the Airports Authority of India and start the process of privatisation. Except for the air traffic control, everything else in the airport will be corporatised.

Already under the airport infrastructure policy, 74 per cent foreign equity was allowed and in special cases 100 per cent.

The minister said a regulatory authority would be set up for the corporatisation of airports which will modulate the process.

Kumar said the corporatisation of airports was vital to keep pace with the growth of air traffic. He said last year 33.7 million domestic passengers and 12.7 million foreign passengers had flown in the country and the five airports selected for corporatisation had accounted for 74 per cent of this traffic.

The AAI had a net profit of Rs 3.16 billion last year and it stood to lose Rs 1.13 billion by corporatisation but this would be made up amply, the minister said. World class airports would help in additional traffic of both passengers and cargo.

Last year, Indian airports handled 5,887 metric tonnes of cargo, 69 per cent of which was international.

He said the corporatisation will send positive signals across the world. Besides, it will be a major sector of investment. The corporatisation will be on the model of MTNL, he added.

The change in the status from a statutory entity (the AAI) to a company will also attract investments from the private sector, including foreign capital which is required to complement the inadequate resources available with the government.

Kumar said the category two Instrument Landing System would be in place at Delhi airport by January 31.

UNI

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