Funds crunch may ground AAI's airport upgrade plans

New Delhi: Shortage of finances seems to be adversely affecting the ongoing modernisation work at 35 non-metro airports in the country.
A mid-year review by the civil aviation ministry has found considerable time and cost overruns in several airport projects being undertaken by the Airports Authority of India (AAI). The aviation ministry has directed the airports operator to put in place an effective monitoring mechanism to avoid delays.
"The delay in projects pertains to modernisation and augmentation of capacity at 48 non-metro airports and airport infrastructure development in the north-east and other crucial areas," the mid-year review noted. AAI is currently facing shortage of cash as a result of decline in air traffic and reduction in aircraft movement. It is estimated that the airport operator would not be able to generate expected revenues from internal resources during the current five-year Plan.
"The targeted generation of internal resources worth Rs 8,313 crore by AAI would not be feasible," a ministry official, who did not wish to be identified, said. AAI had made a capital expenditure plan of Rs 12,434 crore during the current five-year Plan which it planned to finance through budgetary support, internal resources and borrowing. While it earlier planned to borrow Rs 2,650 crore, it now faces a revenue deficit of about Rs 5,000 crore for project execution due to the slowdown in the aviation sector. The government has advised the airports operator to chart out an alternative plan to fund more projects through private-public partnership (PPP). AAI has decided to borrow Rs 1,200 crore from banks in the current financial year.
11/01/10 Nirbhay Kumar/Economic Times

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Categories: Airports Jan 2010