NEW DELHI: State run airport developer, Airports Authority of India is organizing a mega event on November 11 in the national capital inviting all stakeholders airlines, private airport developers amongst others for a pre-bid conference inviting proposals for the regional connectivity scheme (RCS), project.
AAI in an invitation to all stakeholders has stated that “a selected airline operator will be identified to operate on RCS route or network, on the basis of evaluation of initial proposal and counter proposals for the Viability Gap Funding (VGF), received from airline operators who are having valid air operator permit issued by DGCA (civil aviation regulator, Directorate General of Civil Aviation).
An AAI official said the auction of the RCS routes would be through `e-tendering bidding process’, a similar procedure carried out for auction of spectrum. AAI has been designated to implement the scheme.
The government kick-started the RCS scheme also names as Ude Desh ka Aam Nagrik (UDAN) on October 21 last month. Airlines have a six-week window (till December 2) to submit their initial proposals. The government will take two-three days to scrutinize the proposals and the entire process is likely to take 10 weeks to complete.
The scheme, VGF for airlines who cap fares on these flights at Rs 2,500. It allows only one airlines to fly on a RCS route for three years. However, The airlines are likely to pass on this marginal increase in their operating costs to air passengers which in all likelihood would impact (increase) domestic airfares.
However the industry stakeholders have been reluctant to partner in the Narendra Modi’s ambitious RCS project, as they do not find the proposal offered by the government very lucrative, according to the industry observers.
This tepid response has come in as an embarrassment for the Narendra Modi government that had bet big on the scheme, which is aimed to connect the unconnected mass across the country. The government also is eager to transform the project into reality as it was also part of the election manifesto of BJP for its April-May 2014 elections.