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Government mulling private investment in cargo

Government is considering opening up cargo and related areas to enable greater private investment, reports Gaurav Choudhury.

india Updated: Nov 23, 2006 21:51 IST

Civil aviation minister Praful Patel indicated on Thursday that the government was considering opening up cargo and related areas to enable greater private investment and underlined the need to "meaningfully review" existing government policy.

"There is a need to open up areas like non-scheduled operations, cargo, helicopter and seaplane operations in the country. No formal decision has been taken as yet but government will be looking into the matter", Patel said.

"We are examining various options as the issues concerned cannot be addressed by the prevailing policies", Patel said.

With exports growing at more than 20 per cent, express cargo companies are seeking to cash in on the logistics boom in India.

According to OAG, a global aviation industry information service provider, 20 international airlines are making 230 weekly trips to and from India with a weekly cargo capacity of 21,000 metric tonnes.

The annual growth of cargo carried by all scheduled services of Indian carriers has grown at an annualised rate of 8.4 per cent per annum. The total tonnage handled at all airports in India was 1.4 million tonnes in 2005-06-- up by 9.4 per cent from last year.

Addressing the Indo-EU aviation summit, Patel said that said the long-term plan of the government was to create an "aviation grid" across the country by developing 400 airports and airstrips so as to ensure that a person was located within a 50 km-range from any airport.

Providing domestic air connectivity was a major challenge in India, said the minister.

"It is easier and takes less time to go to a foreign destination than travel from one part of the country to another. This situation needs to be changed," he said.

"Given the strong growth and infrastructure challenges facing India's aviation sector, I am extremely pleased with the prospects of enhacing cooperation in civil aviation with India. The scope for cooperation is huge and will benefit both India and EU industry," European Commission Vice President Jacques Barrot said.

He also proposed the signing of a "horizontal agreement" between the two sides. Officials of India and the EU will meet in early 2007. The aim of the "horizontal agreement" will be to amend certain provisions in the bilateral agreements thereby providing legal certainty to these agreements and the operators flying under them.

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First Published: Nov 23, 2006 21:51 IST