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No-objection clause may ground new metro airports

Gaurav Raghuvanshi & Sidhartha

Greenfield airport projects may require a no-objection certificate from the operators who bag the lease contract for the four metro airports.

The civil aviation ministry is likely to introduce such a clause in the lease agreement.

The ministry, which would be approaching the Union Cabinet shortly with the draft agreement, is of the opinion that such a clause is essential to attract investor interest.

As many as 71 international companies had evinced interest in the four airports during the roadshows in Delhi and London.

The proposal, if cleared by the cabinet, would put paid to the Maharashtra government's plans of setting up a Rs 110 billion international airport in Navi Mumbai.

The state government has already started acquiring 950 hectares of land for the proposed project and has submitted a feasibility report to the civil aviation ministry.

Civil aviation ministry sources told Business Standard that there was no need to set up a second airport in Mumbai when there was scope to expand Mumbai's Sahar International Airport. They said that even during the roadshows, the prospective bidders had been told that their interests would be protected.

There was also a proposal for setting up an international airport at Greater Noida at a cost of Rs 17 billion. However, subsequent to Rajnath Singh's ouster as chief minister of Uttar Pradesh, the proposal has been put in the back burner.

The leasing agreement for the four metros is expected to serve as the model for privatisation of all other airports.

On the leasing agreement, ministry sources said that while most of the issues had been sorted out, it is being debated whether the government should specify a minimum investment that an operator would be required to make.

Also, the structure of the proposed Airport Economic Regulatory Authority is still being finalised.

A decision on the role of Airports Authority of India after the airports are leased is expected to be taken over the next few days, they added.

Further, the government is yet to take a decision if some standards can be specified for regulatory agencies like those for Customs and immigration.

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