Draft guidelines for Indian greenfield airports ready
The Committee on Infrastructure (COI) headed by the Prime Minister, on 18th April 2007 had directed the Constitution of an Inter Ministerial Group (IMG) under the chairmanship of Secretary (Civil Aviation) to recommend the principles, guidelines and licencing conditions for greenfield airports. This was done with a view to bridging the growing deficit in airport infrastructure. The anticipated investment in airport development during the Eleventh Plan is over Rs.40,000 crores, both from public and private sources, including for greenfield airports. It is, therefore, necessary to lay down the policy guidelines that would govern proposals for setting up greenfield airports, other than defence airports.
An IMG under the chairmanship of Secretary (Civil Aviation) was constituted by the Ministry of Civil Aviation on 14th May 2007 with representatives from the Ministries of Defence, Home Affairs, Department of Economic Affairs, Planning Commission and officials of the Ministry of Civil Aviation.
As per new draft policy, the mandatory approval of the Central Government for Greenfield airports should be dispensed with in all cases except in those where the project proposal is not in conformity with the policy. Certain functions to be performed at the airport such as air traffic services, security, customs, immigration etc. would be reserved to be performed by the central agencies. An airport company seeking a license would be required to obtain certain clearances from these central agencies. The guidelines of the respective agencies would be notified by them accordingly.
State Governments desires of setting up a greenfield airport can either set it by itself or through any of its designated entity or a Joint Venture Company. The State Government would consider granting land (concessional or otherwise), real estate development right, airport connectivity and fiscal concessions to such an airport company. In case a private party is to be selected, it would be through competitive bidding.
As per the draft policy, since the grant of a license for a greenfield airport involves several agencies, a Steering Committee is to be set up under the
chairmanship of the Secretary (Civil Aviation) to coordinate and monitor the various clearances required for setting up a greenfield airport.
As per the draft policy, greenfield airports to be set up by the Airports Authority of India would be preferably constructed through Public Private Partnership (PPP) and such airports would be financed substantially through PPP concessions. Land for such airports will have to be provided by the AAI and the concessions for development of greenfield airports would be awarded through open competitive bidding based on model bidding documents. Where it is not feasible to follow the PPP route, AAI could set up greenfield airports by itself, as may be approved by the Government on a case to case bases. Financing and development of any other airport would be the responsibility of the Airport Company seeking the license. Land for this purpose would have to be acquired by such airport company in accordance with the existing policy of the Government.
In case a State Government wishes to promote the setting up of airports in the State, it could either :
· Apply to DGCA for a license itself, in which event the State Government would be responsible for development and operation of the airport; or
· An entity of the State Government could apply for a license to DGCA, in which event such entity would be responsible for development and operation of the airport;
· The State Government or its corporation may select a private entity and form a Joint Venture Company (JVC) in the private sector and in such an event, the JVC would be responsible for development and operation of the airport under a license from DGCA; or
· Allot land to a private Airport Company for development and operation of an airport under a license from DGCA.
In case a State Government wishes to facilitate setting up of airport, it could provide the following to the respective Airport Company:
· Land, concessional or otherwise;
· Real estate development rights in and around greenfield airports;
· Airport connectivity; and
· Fiscal incentives by way of exemptions from State taxes.
The draft guidelines will now require the approval of the COI.