Airports Authority of India says regional connectivity scheme receives encouraging response
NEW DELHI: State-run airport developer, the Airports Authority of India (AAI) on Wednesday said it has received an encouraging response to its Regional Connectivity Scheme (RCS), receiving 45 proposals from 11 bidders covering more than 200 RCS air routes. The deadline for submitting initial proposals was Tuesday.
AAI said these initial proposals cover as many as 65 airports, of which there are 52 unserved and 13 underserved airports as per the provisions of the scheme.
"Counter-bids have now been invited against these initial proposals, the last date of submission for which is February 1, 2017,” AAI said, adding that the response has been very encouraging The Regional Connectivity Scheme is also called UDAN or "Ude Desh Ka Aam Nagrik".
The AAI is an implementing agency for RCS. The routes or networks will be awarded to the bidders who quote the lowest requirement of Viability Gap Funding (VGF) against such routes, the AAI said. To give it a push, the government is offering concessions such as free parking of planes at airports, navigation and airport charges besides offering airlines with Viability Gap Funding (VGF) to kick off operations from the unserved and underserved airports.
The difference in cost of operations borne by a carrier for covering underserved or unserved airports under RCS will be compensated through the VGF. The VGF will be available for three years for airlines flying under RCS, followed by a two-year cooling-off period. It will be limited to nine seats for a 12-seater aircraft and a maximum of 40 seats for larger aircraft.
To ensure that operations on the ground start with a minimum time-gap after the bidding is completed, parallel action has also been initiated by the Ministry of Civil Aviation with AAI, state governments, the Directorate General of Civil Aviation (DGCA) and the Bureau of Civil Aviation Security (BCAS).
The government had launched the RCS on October 21 last year and it is a key component of the National Civil Aviation Policy (NCAP) which was released on June 15 last year.
The RCS scheme, which would be in operation for a period of 10 years aims to connect remote unserved and underserved regions of the country through the revival of existing airstrips and airports.
In the first phase, the government plans to make 60 airports -- ten owned by AAI and 50 by state governments -- operational over the next three years.
The fare for a one-hour journey of approximately 500 km on a fixed wing aircraft or a 30-minute journey on a helicopter has been capped at Rs. 2,500 under the scheme, with proportionate pricing for routes of different lengths and duration.