CHENNAI: The three new airports in Tamil Nadu identified under the Regional Connectivity Scheme (RCS) will be taken up once the State Government signs the memorandum of understanding (MoU) with the Ministry of Civil Aviation and the Airport Authority of India (AAI), say senior officials, who add that the proposal is expected to move forward after the high-voltage campaign for Uttar Pradesh poll is over.
“We had a meeting with the Tamil Nadu chief secretary as some issues are yet to be ironed out,” says V V G Raju, regional executive director, southern region, AAI, while speaking to Express on the sidelines of the launch of ‘Project Smile Week’ at Chennai airport on Wednesday.
Raju said bids had been called for Salem, Neyveli and Hosur airports that were selected under the first phase of the UDAN (Ude Desh ka Aam Nagrik).
One of the issues that has cropped up is the viability gap funding (VGF) which will compensate the difference in the cost of operations borne by a carrier for covering underserved or unserved airports under the scheme and tax rebate for aircraft fuel. The State has to bear 20 per cent of the cost.
Another important issue is the rate of value added tax on aviation turbine fuel (ATF) which has to be reduced to 1 per cent or less at these three airports for 10 years.
Although the MoU is yet to be signed with the State Government, bids have already been called for the three airports, Raju said, adding that the routes and networks would be awarded to bidders probably after the UP polls. Of the three, Salem, which has almost all the necessary infrastructure, will not take long to become operational.
“On Neyveli, we have the airstrip and the focus will be to have a terminal building, which can take six to eight months,” he said. Hosur also has the required facilities to be put into operation soon, he added.
The routes or networks are to be awarded to the bidders who quote the lowest VGF on such routes. To a query on which operators have bid to fly from these routes, Raju refused to comment. He said headquarters would have to take a final call on that.
RCS is the key component of the National Civil Aviation Policy (NCAP). The fare for a one-hour journey of about 500 km on a fixed wing aircraft or a 30-minute journey by helicopter has been capped at Rs 2,500 under the scheme, with proportionate pricing for routes of different lengths and duration.