Logistics

Govt aims to make India a global MRO hub with new liberalised policy

Our Bureau New Delhi | Updated on September 09, 2021

FILE PHOTO   -  REUTERS

The global market is worth $80 billion in which India’s share is just 2.5% or approximately ₹15,000 crore

The Civil Aviation Ministry has announced new MRO (Maintenance & Repair Overhaul) Policy that envisages new centres to be set up at eight airports including Chennai and Begumpet in Hyderabad.

The new Policy is part of the 100 days agenda of the Ministry. MRO is a kind of servicing centre for aircraft.

“Our goal is to make India a global MRO Hub,” Civil Aviation Minister Jyotiraditya Scindia said while announcing the new Policy here on Thursday.

Policy features

As on date, the global market of MRO is worth $80 billion in which India’s share is just 2.5 per cent (approximately ₹15,000 crore) and just 15 per cent of that goes to Indian companies while the remaining is pocketed by foreign firms.

“India has total of 710 aircrafts and the number is expected to go up. Each of the aircraft needs to go for check at regular interval,” the Minister said.

Scindia said the new policy will be different from the exiting policy on six counts.

The process of allotment will be through open tender as against based on the agency’s request, period of allotment will be 30 years and not 3-5 years in most of the cases as of now, AAI will not determine the rate of the lease rental but it will be done through a bidding process, escalation rate for the lease rental will be 15 per cent after every three years and not 7.5-10 per cent per annum, and royalty has been abolished.

In case of renewal of contract of existing leaseholders, till now, decision used to be taken on a case-to-case basis. Now, on expiry of the existing contracts, the land which was given to these MROs will be allotted, based on a bidding process.

The existing MRO would be eligible to participate in the bid. The existing MRO would have the right of first refusal if its bid is within 15 per cent given by the highest bidder, and agrees to match the rates quoted by the highest bidder. Also, the existing MRO will settle all disputes and clear all the outstanding dues.

New FTOs

Talking about Flight Training Organisations (FTOs, Scindia said eight new such institution at AAI airports are being set up under PPP model in Phase-I at Belagavi (Karnataka), Jalgaon (Maharashtra), Kalaburgi (Karnataka), Khajuraho (Madhya Pradesh) and Lilabari (Assam).

Also, the concept of airport royalty (revenue share payment by FTOs to AAI) has been abolished and minimum land rentals have been rationalised from several crore to just ₹15 lakh.

As part of infrastructure targets, the agenda include opening up of Kushinagar Airport in Uttar Pradesh, setting up new terminal building at Dehradun Airport and Agartala Airport beside setting the foundation stone of Jewar Airport in Uttar Pradesh.

Under the policy targets, five airports – Keshod (Gujarat), Deoghar (Jharkhand), Gondia (Maharashtra), Sindhudurg (Maharashtra) and Kushinagar (Uttar Pradesh) and 6 heliports – Sanjoli, Sase, Mandi, and Baddi (all in Himachal Pradesh) beside Haldwani and Almora (Uttarakhand) – are to be made operational under the UDAN scheme.

Published on September 09, 2021

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