NEW DELHI: Union Finance Minister Arun Jaitley presenting the Union Budget 2017-18 on Wednesday announced that select airports in tier-2 cities would be taken up for operations and would be developed on Public-Private Partnership (PPP) mode.
The PPP model for airports was started in India a decade ago in Delhi and Mumbai. Currently, Nagpur, Hyderabad, Bengaluru and Kochi also have private airports.
Last week the Airports Authority of India was contemplating a partial PPP model for Ahmedabad and Jaipur airports as well. Two airports in Andhra Pradesh are also slated to be built on the PPP model.
Public-private partnership (PPP) involves a funding model for a public infrastructure project which is funded and operated through a partnership of the government and one or more private sector companies. It involves a contract between a public sector authority and a private party.
Last month, industry body, FICCI has stated that there are 44 potential airports that could be developed under the RCS policy. The government had said that it would be evaluating it through an independent mechanism to ensure the success of RCS project.
The announcements on developing tier-2 airports on PPP mode comes in the wake of government’s ambitious plan to connect remote airports, which include unserved and underserved airports under the regional connectivity scheme (RCS).
India currently has 76 functional airports and the government aims to add 50 more airports under the RCS project, that is yet to take-off, as airlines are not finding the project viable as they are not sure of the demand of air travel to these remote destinations.
The Civil Aviation Ministry has received a substantial increase of over 22 percent in budgetary allocation at Rs 5,167.60 crore for the next financial year.
Similarly, state-run airport developer, Airports Authority of India (AAI) that has been mandated to develop remote airports under the Regional Connectivity Scheme (RCS) project has got a budgetary support of Rs 2,543, which includes Rs 2,443 crore as capital infusion in the new budget for 2017-18.
Also budgetary grants for Bureau of Civil Aviation Security (BCAS), the regulator for aviation security in India has been increased to Rs 214.5 crore from Rs 164.58 crore, while the regulator for civil aviation sector, DGCA has got almost 800 per cent increase in budgetary support of Rs 230.55 crore from Rs 28.17 crore in the last budget. Interestingly, UN aviation watchdog, International Civil Aviation Organisation (ICAO) is coming here to audit India’s air safety preparedness in the second half of this year.