The Hindu Business Line : FDI capped at 49 pc for airports' revamp

THE Congress-led UPA coalition Government has lowered the foreign direct investment (FDI) cap to 49 per cent in the proposed modernisation and restructuring of the two metro airports at Delhi and Mumbai.

It has extended the last date for submission of expression of interest (EoI) by prospective bidders by 45 days.

At a press conference here on Wednesday, the Minister for Civil Aviation, Mr Praful Patel, told newspersons that of the remaining 51 per cent majority stake, the Airports Authority of India (AAI) would hold 26 per cent while the balance 25 per cent could be held by either Indian companies or financial institutions (FIs).

The BJP-led NDA Government had earlier mandated that foreign investors could pick up a stake of 74 per cent while the remaining 26 per cent would be held by the AAI.

"There is no question that the lowering of the stake which a foreign investor can hold will send out a negative signal. We are opening up a sector which has been closed for more than 50 years. The modernisation and restructuring of the two airports is on course and we hope to complete it this fiscal year. However, after wide-ranging consultations, it has been decided to extend the last date for submission of EoI to July 20," Mr Patel said.

On the issue of whether airlines will be allowed to participate in the modernisation programme, the Minister said that the full guidelines on the matter had not yet been finalised. Mr Patel, however, noted that there would be adequate safeguards to ensure that no monopoly-like situation is created.

Commenting on the fleet acquisition plan of Air India (AI) and Indian Airlines (IA), Mr Patel pointed to the various initiatives being taken, including allowing the IA subsidiary, Alliance Air, to lease some aircraft. "There could be some issues, we feel we could get better pricing. We will definitely want a fresh look. But that does not mean that we will reverse the decisions taken by the previous Government. No firm decision has yet been taken on the matter. However, one thing is certain, the process will be completed in 2004 as both the airlines require aircraft," the Minister said.

Besides, the civil aviation policy which has been in the making for the past several years will also be firmed up during the year, Mr Patel said.

In response to a question on the skyrocketing prices of Aviation Turbine Fuel (ATF), Mr Patel said that he had requested the Finance Minister to announce ATF as a "declared" good.

More Stories on : Foreign Direct Investment | Policy | Airlines

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
GMR forms consortium with Fraport, IDF to bid for airports revamp

Chidambaram meets market players to allay fears

Excise hike on ATF, duty cut on LPG, kerosene mooted

Honda Motor renews partnership with Hero — Model Committee to help minimise cannibalisation

Index heavyweights prop up market

FDI capped at 49 pc for airports' revamp

Change in IFCI-PNB merger plan ruled out