Thursday, May 18, 2006

Govt set to clear 74% FDI for airport revamp

New Delhi: The Centre may allow FDI up to 74% in the modernisation of existing airports, including those at Chennai and Kolkata. The move is significant in the context of restructuring of Delhi and Mumbai airports, where FDI was restricted to 49%.
State governments have no role in deciding equity caps for these projects. Airports Authority of India (AAI), the central public sector undertaking, owns these airports in the country and only the civil aviation ministry has the authority to decide on the level of foreign participation, government sources added.
According to existing norms, 100% FDI is permitted in greenfield airports, whereas in the modernisation of airports, this limit is 74%. In spite of the 74% FDI cap, the government has restricted foreign equity participation to 49% in Delhi and Mumbai projects.
The decision on modernisation of Kolkata and Chennai is expected soon, due to increasing pressures from coalition parties of the UPA government in West Bengal and Tamil Nadu.
18/05/06 Gunjan Pradhan Sinha & Rajeev Jayaswal/Economic Times
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