Monday, June 11, 2007

Ahead of merchant airports policy, companies scout for land, tie-ups

In anticipation of new government rules that are expected to allow new airports to be built by private entrepreneurs with the requisite land, aerodrome developers have started scouting for locations to build new airports and tying up with realty firms to ease land acquisition troubles.
Close on the heels of German airport investor Fraport AG’s tie-up with DLF Ltd to develop up to five airports, Singapore’s Changi Airports International has started work with local partner Tata Realty and Infrastructure Ltd on its search for viable locations for such investments.
Senior civil aviation ministry officials expect other such proposals to come up soon.
The ministry expects to circulate a draft “merchant airport” policy among various other ministries within the next six weeks before sending the guidelines for such private investment to the Union cabinet for approval, civil aviation secretary Ashok Chawla said.
Merchant airports are expected to allow up to 100% foreign ownership; investors could even be foreign airport companies or airlines.
Merchant airports would cater to domestic and international passenger traffic apart from meeting cargo requirements of industry and retail chains, Chawla said. The policy on greenfield airports allows private developers but the land is to be acquired by the state government.
Airport security and air traffic control is likely to remain with government bodies such as the Central Industrial Security Force, Central Reserve Police Force and AAI. Further, airport projects will require clearance from the defence and environment ministries.
Analysts said new airports in smaller cities may find operations will take longer to break even since most of passenger traffic is concentrated in India’s large cities, which already have large airports or have plans for second airports.
11/06/07 Tarun Shukla/Livemint