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Merchant airport policy takes shape

The civil aviation ministry convenes a meeting of industry representatives as precursor to giving final shape to a policy to promote 'merchant greenfield airports', reports Gaurav Choudhury.

india Updated: May 15, 2007 23:13 IST

The civil aviation ministry has convened a meeting of industry representatives on Wednesday as precursor to giving final shape to a policy to promote "merchant greenfield airports".

Merchant greenfield airports will be private airports built on private lands within permissible civil aviation parameters and air-traffic management regime.

Civil Aviation Minister Praful Patel has already said the government has taken a "very positive view" of the idea. "If somebody is willing to take the risk, has the land and is willing to build airports, we are going to look at it in a very positive manner," sources who did not wish to be identified said.

The meeting on Wednesday, sources said, was primarily designed to gauge the interest within industry about the idea. It is also expected to discuss possible contours of a policy on merchant airports.

The ministry has also stressed the need to "revisit" the policy on airports as almost every airport expansion project is facing problems over land acquisition.

Apart from Kochi International Airport, all other operational airports in India are owned by the government. For the greenfield airports in Hyderabad and Bangalore, which are being developed by private consortiums, the land has been acquired by the government and the Airports Authority of India is a junior partner in both.

The government has approved a proposed Bill for setting up the Airport Economic Regulatory Authority. The regulatory mechanism for merchant airports will be in place after the Bill is passed by Parliament, most probably in the next Monsoon session.

The prime objective of Airport Economic Regulatory Authority will be to create a level playing field and foster competition among all major airports--government owned, public-private partnership based, and private--encourage investment in airport facilities, regulate tariffs for aeronautical services, protect the reasonable interest of users, and operate efficient, economic and viable airports.

Moreover, due to the unprecedented growth in India's aviation industry, the ministry has also stressed the need for setting up secondary airports in major cities. Patel told Parliament recently that "work on building a new airport should proceed parallel to the modernisation project at Indira Gandhi International Airport in Delhi".

"Just like airlines, airports should also be made to compete with each other and then benefits will flow to the passengers,'' he said.

There are about 300 airstrips in the country. While some of them are owned by the Ministry of Defence, the civilian airports are either owned by the state governments or the Airports Authority of India (AAI). The government has already decided to develop 35 non-metro airports through the public-private partnership model.