He added that if this model failed to generate more revenue than AAI, the Union Government would drop the plan and AAI would take up the modernisation programme itself.

Our Bureau

Kolkata, Nov. 14

AFTER facing stiff opposition from the Left parties and the trade unions, the Union Civil Aviation Minister, Mr Praful Patel, said the model for the modernisation of the four metro airports had not yet been finalised.

A model will be ready only after studying the proposals submitted by the six bidders for the modernisation programme of the Delhi and Mumbai airports, he said.

Talking to reporters after attending a programme in the city, Mr Patel said the six bids would be opened by December. He was convinced that the handing over of the two airports to private players would be profitable.

Leftists and trade union leaders were apprehending that if these two airports were handed over, the earnings of the Airports Authority of India would fall drastically and AAI would not be able to invest in other modernisation activities.

"I totally agree with the apprehension of the others. Once we open the bids, we will find out whether the revenue sharing model between AAI and the private players for the Delhi and Mumbai airports is an acceptable proposal," Mr Patel said.

He added that if this model failed to generate more revenue than AAI, the Union Government would drop the plan and AAI would take up the modernisation programme itself.

The final decision on the matter will be taken by the Committee on Infrastructure, which is headed by the Prime Minister. Subsequent to the decision, the funding programme for the Kolkata and Chennai airports will be finalised.

The Delhi and Mumbai airports generate about Rs 500 crore worth of annual revenue, which is around 70 per cent of AAI's total earnings. At present, only 11-12 airports are generating profits for AAI.

He, however, clarified that if AAI modernised the four metro airports, still then for non-aeronautical activities there will be public-private partnerships. Other than the four metro airports, all others will be modernised by AAI.

Other metros: On the modernisation of the Kolkata and Chennai airports, he said, it would cost approximately Rs 5,000 crore each. A design for the modernisation of the international terminal of the Kolkata has been prepared by Airports de Paris International.

For the Chennai airport, another international agency will be appointed. "In fact, designs for the modernisation of all airports will be prepared by global agencies. For the Dibrugarh airport, the design is ready and work will start soon," Mr Patel said.

According to him, in the next 10 years, the total investment in the aviation sector will be more than $50 billion. At present, only seven million Indians fly once a year. If it increased to 70 million, there will be a demand of 2,000 new aircrafts, he said.

(This article was published in the Business Line print edition dated November 15, 2005)
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