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Airports Authority focuses on metros

The Airports Authority of India has earmarked a capital expenditure of Rs 3,000 crore for the current financial year, of which Rs. 1,000 crore will be from internal accruals and the remainder from debt, reports Samiran Saha

business Updated: May 10, 2009 22:15 IST

The Airports Authority of India has earmarked a capital expenditure of Rs 3,000 crore for the current financial year, of which Rs. 1,000 crore will be from internal accruals and the remainder from debt.

Cash-crunched AAI is now targeting to upgrade just 10-12 important non-metro airports and has decided to defer others, while focusing on large metro airports. “A major portion of the capital expenditure would be utilised for modernisation and upgrade of Kolkata and Chennai airport while rest of it would be invested for upgrade of the 35 non-metro airports that AAI has undertaken,” a senior AAI official, who asked not to be identified, told Hindustan Times.

He said AAI would now have a new model concession agreement for city side development that includes airport terminal buildings, lounges, shopping areas and parking through the public private partnership (PPP) route. “The earlier agreements were cancelled and it is expected that the concession agreements would now be signed after a new government takes over,” he added.

The current economic slowdown and non-payment of dues by domestic and foreign airlines has already forced AAI to put aside ambitions to upgrade 35 non-metro airports for which work was to begin in the last financial year.

According to government data, domestic and foreign airlines together owe (AAI) over Rs 1,100 crore which has left the organisation cash starved, leading it to defer its non-metro airport upgrade plans.

The modernisation exercise of all the 35 airports is estimated to cost Rs 6,000 crore. These include the airports at Indore, Bhopal, Ranchi, Raipur, Goa, Amritsar, and Dehradun, but the current focus is on a few. The airport operator had aimed to complete the upgrade of some of the non-metros by the end of financial year 2009–10, but that schedule is most likely to be missed.