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State govts may hold key in greenfield airport projects

Analysts say draft policy force AAI either to form JVs for many of its present airports in the wake of competition from pvt developers, reports Gaurav Choudhury.

india Updated: Oct 23, 2007 21:26 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times

The government has proposed to open the floodgates for greenfield airports. The draft guidelines issued on Tuesday seek to empower state governments to allow entry of private developers and has dispensed with the Centre's mandatory approval for greenfield airports.

Analysts said that draft policy, if approved, would force the government-owned Airports Authority of India (AAI) either to form joint ventures for several of its existing airports in the wake of competition from private developers. The policy, analysts said, could result in a new breed of developers setting up greenfield airports and seeking to develop a full-fledged township in the periphery.

The Samshadabad airport near Hyderabad, being built by the GMR Group, is the country's first greenfield project spread over 5,000 acres. The Centre and the Andhra Pradesh government hold 13 per cent stake each in the airport.

The draft policy does not stipulate on mandatory shareholding by the state or the Centre. The state government may select a private entity and form a joint-venture company (JVC) or allot land to a private company for development and operation of the airport through a competitive bidding process.

The government has envisioned an investment of close to $9 billion (Rs 36,000 crore) to develop about 100 small and greenfield airports in the country during the 11th Plan period (2007-2012). The government expects the private sector to contribute about Rs 24,000 crore and the AAI to pitch in with Rs 12,000 crore.

Many state governments, including Karnataka, Maharashtra, Rajasthan, Gujarat, Bihar and the North-eastern states, have shown keen interest in the project. The Karnataka government has invited bids for development of airports in Bijaour, Shimoga, Hasan and Gulbarga and international airport developers have shown interest in these.

The airports that would be developed during the 11th Plan period include Asansol, Durgapur, Bhagalpur, Navi Mumbai, Shirdi, Tawang, Itanagar and Kohima.

First Published: Oct 23, 2007 21:18 IST