AAI gets mini-ratna status

New Delhi: The Airports Authority of India (AAI), the country’s largest airport operator, has been granted the mini-ratna status under category-I. However, the state-run operator will only be able to exercise its powers of autonomy in terms of investment in projects and forming joint ventures after its board is restructured by inducting at least three non-official directors. According to sources, the restructuring of the AAI board has been pending for a year.
The status was conveyed to the Ministry of Civil Aviation yesterday by the Department of Public Enterprises (DPE) and the Ministry of Heavy Industries.
According to DPE’s guidelines, a category-I mini-ratna company is allowed to incur capital expenditure on new projects, modernisation, purchase of equipment without government approval up to Rs 300 crore, or equal to its net worth, whichever is lower. Currently, AAI has to seek government approval for any project exceeding Rs 150 crore.
This apart, the operator will be allowed to establish joint ventures (JVs) and subsidiaries in the country, with the stipulation that its equity investment in the JV should be limited to Rs 100 crore in any one project, should not exceed 5 per cent of the net worth of the public sector enterprise (PSE) in any one project, or 15 per cent of the net worth of the PSE in all JVs or subsidiaries put together.
It, however, has to be finalised with the concurrence of the civil aviation ministry. It will also be allowed to enter into technology JVs, strategic alliances and to obtain technology and know-how by purchase or other arrangements, subject to government guidelines.
19/12/08 Business Standard

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Categories: Airports Dec 2008