PPP planned for developing non-metro airports’ city-side

NEW DELHI: Infrastructure developers, interested in building city-side projects around a non-metro airport, may have to join hands with Airport Authority of India (AAI).

The government is considering to make it a pre-condition for a private developer, an official in the government said.

“The government is planning to invite bids for non-metro airport development projects soon. The civil aviation ministry is revising the terms and conditions (for bids) after that request for qualifications (RFQs) from interested parties will be invited. It has identified about a dozen small airports, including Amritsar and Udaipur in the first round,” the official, who didn’t wish to be named, said.

City side work include development of hotels, shopping complexes, entertainment facilities and convention centres around an airport.

The official said the modified document would enable AAI to hold equity in the special purpose vehicles (SPVs) created by private firms for building city-side infrastructure. As per the proposal AAI will have an option to get fixed income from the developer with an escalation clause.

“The presence of public sector AAI will address employees’ concerns,” he said. The city-side works for non-metro airports had earlier hit a roadblock with AAI employee unions opposing the move to allow private developers to undertake commercial operation and maintenance of terminal buildings. Officials of the aviation ministry and AAI had met on Monday to discuss the issue related to the city-side development of non-metro airports by private firms.

The aviation ministry plans to upgrade 35 non-metro airports including various state capitals with a total investment (both public and private) of about Rs 40,000 crore. While it targeted to complete the infrastructural works at 24 airports by 2009 the remaining airports had a deadline of March, 2010.

Airside works at nine small airports such as Trichy, Trivendrum, Udaipur, Ahmedabad and Jaipur have been completed but their city side development is yet to begin, the official said. Airside works include terminal building, runway, taxiway and related infrastructure. “We are expecting that airside works at three more airports would be completed in a month or two,” he said.