Sops sought for Intl. airport in AP

V.Rishi Kumar

HYDERABAD, Dec.6

THE Andhra Pradesh Government and the GMR Vasavi-Malaysia Airport Holdings Berhard (MAHB) consortium, the chosen developers of the greenfield Hyderabad international airport project, are awaiting the Central Government nod for certain concessions to go ahead with the project.

The developers had requested the State Government to consider tax concessions which would facilitate the consortium to bring down the total project investment. Based on this representation, the State Government had petitioned the Central Government for concessions.

As of now, three imposts--foreign travel tax, passenger service tax and the internal travel tax are going to the Central Government pool without the States benefiting from them. Since the Government has embarked on the greenfield infrastructure project, if these taxes are extended to the State Government, this would help bring down overall investment on the project, the Government contended.

While the phase one of the airport project will involve an investment of Rs.1300 crores, the overall project with related infrastructure is expected to be about Rs.2000 crores. If these concessions are extended, the State Government and the developers would benefit by about Rs.500 crores, it is estimated, Government sources said.

The thinking behind such a move is to make the project financially viable and also facilitate the developers to sign up the agreement and go in for financial closure of the project.

The matter was also raised by the Chief Minister, Mr.N. Chandrababu Naidu, last month at Delhi and when the Prime Minister, Mr.Atal Behari Vajpayee, was in Hyderabad to inaugurate the Indian School of Business. The PM has referred the matter to a committee to examine its implications.