Onus lies on States to revive torpid airports

States that are quicker on their feet likely to see benefit.

June 05, 2016 10:45 pm | Updated October 18, 2016 01:00 pm IST - NEW DELHI:

The Union government has put the onus on states to secure commitments from airlines to start operations before dormant airports can be revived.

The move follows the Centre’s ambitious plans to revive 50 dormant airports in three years.

The Union Civil Aviation Ministry has told the state governments that the first movers to bring a proposal for revival of airports will have an advantage as they will have priority in the limited central funds to be set up for the regional connectivity scheme.

“We have told states if they want their airports to be revived and connected under the regional connectivity scheme they must start working with the airlines and persuade them to choose one of the destinations in their state. If airlines show interest, we will start revival of the airports,” Civil Aviation Secretary R.N. Choubey said.

Road shows

This message will be communicated in person through road shows which Civil Aviation Ministry officials may likely conduct in July, along with entrepreneurs and airlines, to sensitise states about the regional connectivity plans which are interlinked with revival of airports.

The Centre has proposed a regional connectivity scheme under which subsidy will be provided to airlines to set airfares on regional routes at Rs.2,500 for an hour’s flight. While the Centre is expected to contribute 80 per cent, of the costs incurred, through viability gap-funding (VGF) from the regional connectivity fund, the remaining 20 per cent will come from the states.

“We have limited funds for the viability gap-funding and all states would want regional connectivity. So if a state is slow in selling its destination and sending the proposal through airlines for revival then states that are quicker on their feet are likely to get the benefit,” said the civil aviation secretary. The state governments have been asked to get written commitments to start operations on underserved airstrips from the airlines.

Fund size

Mr. Choubey said the likely size of the fund will be around Rs.500-Rs.600 crore initially. “We think this is what will be required in the beginning. Once the business picks up, VGF corpus will also grow,” Mr. Choubey added. Taking the Union Budget announcement forward, the Civil Aviation Ministry has sent a proposal to revive 50 dormant airports for around Rs.5,000 crore to the Expenditure Finance Committee (EFC) for appraisal.

The government is not averse to private sector participation in building the airport infrastructure around the un-served or underserved air strips, Mr. Choubey said.

“We know there will be limited interest from the private sector to revive such airports but we are very much open to the idea. However, a final call on roping in private players will be taken by the Airports Authority of India (AAI) for their air strips and by the respective state government for the air strips that they own,” he said.

A senior civil aviation ministry official, however, said the proposal sent to the EPC doesn’t mention the names of the airports or airstrips the government proposes to revive.

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