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Govt mulls cess for small airports, pvt strips

The Centre may impose a cess to fund the devpt of unviable non-metro airports, reports Gaurav Choudhury.

india Updated: Feb 05, 2007 18:54 IST

The government is considering the imposition of a cess to fund the development of otherwise unviable non-metro airports and is also open to the idea of 'merchant greenfield airports' built and run entirely by private developers, similar to private power plants, Civil Aviation Minister Praful Patel said on Monday.

"We are proposing in future to have a cess to support the viability gap funding for development of non-viable airports and air routes," Patel told reporters here on the sidelines of a World Bank conference on infrastructure.

The cess, however, is unlikely to be a part of the Union Budget 2007-08. Patel said thee idea was still at a very 'nascent stage'.

"What we are trying is to either redefine the existing passenger service fee (PSF) or have an additional levy. There may be a change in the nomenclature but no formal proposal has yet been firmed up," he said.

The Airport Economic Regulatory Authority (AERA) Bill will be introduced in the Parliament in this Budget session and the Regulatory Authority is expected to be in place in 2007 itself, Patel said.

Patel said the government would take a 'very positive view' of 'merchant greenfield airports'. These are airports that are completely built and operated by private developers on land acquired by them and run within the permissible air-traffic management regime.

"If somebody is willing to take the risk, has the land and is willing to build the airport, we are going to look at it in a very positive manner," the minister 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 Airport Authority of India (AAI).

The government has already decided to develop 35 non-metro airports through the public-private partnership (PPP) model. The Civil Aviation Ministry will shortly convene a conference of all state governments to develop aviation infrastructure, including pooling these 300 airstrips for development.

"We could also bid out these airstrips in blocks as single airstrips would not be attractive to the investor," the minister said.

The Minister also said that due to the unprecedented growth in the civil aviation sector, there would be a need for secondary airports in non-metro cities as well in the next five to 10 years.

Other than providing the regulatory framework, the government will have a much lesser role to play in airports in the coming years, he said.

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First Published: Feb 05, 2007 18:54 IST