NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News  » Business » 27 airports funded with AAI's earnings from Delhi, Mumbai rentals

27 airports funded with AAI's earnings from Delhi, Mumbai rentals

August 24, 2012 17:17 IST

The Airport Authority of India (AAI) has completed development works at 27 of the 35 brownfield non-metro airports on the back of lease rentals from Mumbai and Delhi airports. The lease rentals from Delhi airport have increased almost three-fold since 2006-07, whereas from Mumbai airport, it has gone up by 37 per cent since 2007-08.

Among the few cities where new international terminal buildings have been commissioned are Ahmedabad, Trivandrum, Chandigarh, Varanasi, Amritsar, Dehradun and Vizag.

A senior AAI official says, "The money collected from the lease rentals after the privatisation of Delhi and Mumbai airports has definitely helped AAI to commission these projects. Work on another four airports is expected to be completed this year."

Regarding privatisation of Kolkata and Chennai airports, Civil Aviation Minister Ajit Singh told Business Standard, "For this, first, the CMs (chief ministers) have to agree. Second, Chennai has no extra land and, so, the city side development is not there. It has already been constructed."

Around Rs 1,305.98 crore was received from Delhi International Airport Limited (DIAL), a GMR-led consortium, and Mumbai International Airport Limited (MIAL), a consortium of GVK industries Ltd. This sum constituted 41 per cent of the total capital expenditure of Rs 2,503 crore (Rs 25.03 billion). Since 2007-08, the revenue share has gone up from 37 per cent of the total capital expenditure of Rs 1,980 crore (Rs 19.8 billion). AAI has equity of 26 per cent in Delhi airport and it fetches around 46 per cent of the revenue from DIAL annually.

According to an AAI official, "AAI is not getting budgetary grant per say. However, it gets some budgetary support/ grant-in-aid from the government for executing some projects under various government schemes."

For 2011-12, AAI received a total grant-in-aid of about Rs 119 crore (Rs 1.19 billion). An AAI official said, "The entire operational area, i.e., runway, taxiway, apron, communication and navigational aids, air traffic management, etc, would remain with the AAI."

The expenditure incurred thereon and the revenue earned thereof would be that of AAI."

Only the city side of the airports, i.e., non-operational areas, including terminal buildings, car park, entire area outside the operational boundary wall would be taken up for development. The security and safety of viable non-metro airports would continue to be with the Bureau of Civil Aviation Security (BCAS), government of India and AAI, and would be maintained as per government guidelines.

AAI holds a minimum of 26 per cent equity in any of the joint venture in the form of assets, and the balance is with private sector/financial institution/state government for city-side development of viable non-metro airports.

Disha Kanwar in New Delhi