AAI to prefer JV route with states for building new airports

Business | Written by : IANS| Updated:

AAI to prefer JV route with states for building new airports

New Delhi, Jan 17 (IANS) Finding it a low-risk model with the states concerned committing to bear the maintenance cost for the first 10 years, the Airports Authority of India (AAI) has decided to take JV (joint venture) route for greenfield airports.

The Centre-controlled AAI has already entered into tie-up with state governments for nearly half a dozen airports to be developed through the JV route.

It will be the preferred mode for taking up new airport projects. In these airports, the AAI will have majority 51 per cent stake while the state government or other agencies hold the remaining 49 per cent, said a senior government official.

The official said that the AAI had earlier developed many airports such as Cooch Behar and Bikaner on their own but they continued to remain loss-making in the absence of airlines operating flights to these towns.

"The AAI has, therefore, decided to enter into joint venture with state governments to spread the investment risk. Subsequently, it has signed agreement with various state governments for jointly building airports," he said.

The official cited the example of Deoghar and Dhalbhumgarh in Jharkhand, Mandi in Himachal Pradesh and Dhulera in Gujarat which are being implemented through JV route with the AAI being the lead partner.

Besides getting land for free from the states concerned, the local government supplies electricity and water at concessional rates.

"The responsibility of bringing business lies on both state governments and the AAI. This provides for sharing the initial cost burden," the official quoted above said.

The Centre has hinted that it will lease out most of the profitable airports currently run by the AAI to private companies. The AAI will be made to focus on building new aviation infrastructure in smaller towns.

"AAI will build RCS (Regional Connectivity Scheme) airports. The government is committed to support the state-run agency in bringing smaller cities on the country's aviation map," said the official, who did not wish to be named.