The Hindu Business Line : AAI may raise Rs 4,000 cr for modernisation

The Airport Authority of India (AAI) may be raising around Rs 4,000 crore from the debt market for the several modernisation projects that it will undertake in the near future.

The authority, which has already got an AAA rating from Crisil, is now preparing its cost involvement for the proposed modernisation of 35 non-metro airports.

In these cities, Mr Praful Patel, Union Civil Aviation Minister, said that apart from the airport other facilities such as hotels and roads would be developed in partnership with private organisations.

"AAI will have to resort to borrowings for carrying out this modernisation activity. If needed it would have to float bonds. We have already short-listed merchant bankers for this purpose," he said.

Mr Patel, however, did not disclose the amount AAI would be raising.

At present, AAI has a cash reserve of Rs 2,000 crore and, on an average, registers an annual internal accrual of Rs 400-500 crore.

If AAI had to undertake the modernisation of the Kolkata airport on its own, as recommended by the West Bengal Government, then its total fund requirement would jump manifold because the minimum cost of it would be Rs 2,000 crore, Mr Patel said.

A senior official of the Ministry said that Rs 4,000 crore is the upper limit for the fund raising capability of AAI.

Sikkim project

Meanwhile, AAI has prepared a report for the Sikkim greenfield airport. The cost of it would be Rs 340 crore.

The Sikkim State Government has assured to provide Rs 100 crore and also the land.

In fact, during the Tenth Plan period AAI would be spending Rs 125 crore on the modernisation, upgradation and improvement of airport facilities in the North-East.

In this period, AAI would be making a capital investment of Rs 315.45 crore in the East and it includes Rs 224.20 crore for the existing Kolkata airport.

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