The Hindu Business Line : Chennai, Kolkata airport modernisation: AAI to raise Rs 2,000 cr in 2 years

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Chennai, Kolkata airport modernisation: AAI to raise Rs 2,000 cr in 2 years

Total reconstruction costs estimated at over Rs 3,500 cr

At a glance
AAI will decide on the cheapest manner of raising the money.
Restructuring Chennai airport estimated at Rs 2,350 cr.
Centre also examining sharing land costs with States.

Our Bureau

New Delhi, July 23Airports Authority of India (AAI) will raise Rs 2,000 crore during 2008-09 and 2009-10 to undertake the modernisation of Chennai and Kolkata airports, the Secretary, Civil Aviation, Mr Ashok Chawla, has said. “The Government has taken a decision that these two airports would be modernised by AAI.

Funding

“AAI plans to raise about Rs 2,000 crore mainly in 2008-09 and 2009-10 as a major portion of the work would be undertaken at that time.

“AAI will decide on what is the cheapest manner of raising the money, whether domestically or through external commercial borrowing (ECB) route,” Mr Chawla said on the sidelines of conference of Chief Secretaries on public-private partnership.

Cost factor

The cost of modernising both the airports is estimated at over Rs 3,500 crore. Restructuring the Chennai airport alone is expected to cost around Rs 2,350 crore.

Estimated cost of constructing the runway, taxiway and apron alone would be around Rs 1,100 crore. The rest of the funds would be required to construct a terminal building, cargo building, car park and for general airport development. The AAI Chairman, Mr K. Ramalingam, added that the Authority should have little problem in raising the funds as it had been given an AAA rating by Crisil.

Bearing land cost

Earlier addressing the conference, Mr Chawla said that the Centre was examining a request from some State Governments to share the cost of acquisition of land for expanding existing airports. At the moment, the States have to bear the entire cost of acquiring land which is then provided free of cost to AAI for airport expansion.

“The cost of real estate is shooting up and acquiring land is becoming an expensive affair. The States have requested the Centre to see whether they can bear some of the cost of land acquisition. No decision has yet been taken on this matter,” Mr Chawla said.

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