Govt may allow AAI to raise Rs 5,000 cr

The government is likely to allow state-owned Airports Authority of India to raise Rs 5,000 crore (Rs 50 billion) through infrastructure bonds to enable it to finance its ongoing programme to modernise and expand a large number of airports across the country.

"They are free to raise resources whichever way they want to. Airports are a vital infrastructure. (The) government will definitely consider the proposal," civil aviation minister Praful Patel told PTI, confirming that the AAI was considering raising Rs 5,000 crore through this measure.

Air India would also get equity infusion from the government and 'we will also try to get some soft loan' for the national carrier, he said, adding that it would eventually go for an initial public offer depending on the market situation, said Patel, who made a record of sorts by taking over charge of the Ministry for the second consecutive five-year term

Patel also made it clear that Air India would not be privatised and any equity dilution would not affect its public sector status.

On airports, official sources had earlier said the AAI's proposal to raise Rs 5,000 crore through infrastructure bonds was being scrutinised by the finance ministry. The nature of the bonds, their tenure and other issues would be finalised after the necessary approval, they had said earlier.