According to civil aviation ministry sources, the ministry plans to create two separate companies for the Mumbai and Delhi airports and a separate holding company to oversee their functioning.
The Airports Authority of India has been asked to submit a proposal with an estimate of the funds needs for the upgradation.
Official sources said the ministry proposed to fund the scheme through the AAI's reserves, estimated at nearly Rs 2,000 crore (Rs 20 billion), and through grants from the Centre.
They said the Delhi airport would require Rs 1,000 crore (Rs 10 billion), while Mumbai would need about Rs 250 crore (Rs 2.50 billion).
The sources said the ministry's haste in finalising an upgradation scheme followed a Cabinet directive to submit a proposal within a month.
Earlier this month, the Cabinet had deferred a decision on metro airport privatisation and had asked the civil aviation ministry to re-work the proposal in consultation with the finance ministry. The process had been expedited due to pressure from the finance ministry, they said.
The civil aviation ministry's proposal to the Cabinet suggested a joint venture route for the four metro airports with the AAI holding a 5 per cent stake in each.
The sources said the Cabinet was essentially concerned about the increase in airport tariffs if left to private players.
The ministry's focus on Delhi and Mumbai stems from the fact that the two airports account for the bulk of passenger and cargo traffic.
Put together, they garnered revenues of about Rs 734 crore (Rs 7.34 billion) in 2001-2002 and have been making profits for the past three years.
Sources said though the upgradation of the Kolkata and Chennai airports was on the cards, the Delhi and Mumbai airports were 'top priority.'
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