The Hindu Business Line : Govt plans allowing 100% FDI in merchant airport

Greenfield projects
Currently, 100 per cent FDI, through automatic route, is permitted in the development of greenfield airports projects.
Merchant airports would be developed entirely by private sector with no Govt funding.

New Delhi May 18 The Government plans to allow 100 per cent foreign direct investment (FDI) in the creation of merchant airports but is still to take a view on whether an airline or airport would be allowed to set up such a project.

This emerged at a meeting, the Secretary, Civil Aviation, Mr Ashok Chawla, had with various stakeholders including bankers, airport operators, infrastructure companies and representatives of the apex chambers of commerce and industry.

"The thinking in the Government is to allow 100 per cent FDI in such airports. The final policy is still to be fine tuned on who would be allowed through the 100 per cent route," a senior Government official said.

Currently, 100 per cent FDI, through automatic route, is permitted in the development of greenfield airports projects.

Feedback sought

The stakeholders who participated in the meeting added that the Government was keen to have private airports and wanted feedback from industry on how to move forward.

An official statement issued here states that the idea of `merchant airports' has been conceptualised as airport infrastructure being developed entirely by the private sector with private resources and no Government funding.

`Merchant airports'

The Government would, however, continue to be involved in several ways with the project especially as safety and security issues at these airports would remain with it. The Government would also have to give a licence for such airports to operate.

Besides, these projects would also need clearances from various Central Government Ministries including Defence and Environment among others.

The proposal for merchant airports is being considered now as air traffic is growing at a rapid pace and the Government is keen to use its resources for the all round development of infrastructure and not airports alone. The entrepreneur setting up such a project would be expected to set up and operate such airports on the basis of commercial viability.

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