The Indian government may allow domestic and international airlines to hold stakes of up to 10% in companies bidding for the privatisation and upgrading of the airports at Mumbai and New Dehli.
Current rules do not let airlines participate in airport projects, but according to civil aviation ministry sources, the scheme is likely to be included in new regulations the government will introduce as part of its planned foreign direct investment (FDI) regulations for the sector. The government believes that allowing airlines to become part of the airport consortia would generate more interest among potential investors, as well as attract more traffic to these two airports.
Senior vice-president of the Centre for Asia Pacific Aviation Kapil Kaul says: "Given the resource crunch the government faces and the increasing insolvency of most airports, it becomes clear that privatisation is attractive and in fact the only practical solution. FDI is the recognised driver in the country's growth and is critical in developing a world-class airport infrastructure." He adds that India needs billions of dollars worth of investment in airport infrastructure and new greenfield airports. "Foreign capital is essential to build the infrastructure and provide world-class services," he says.
India's civil aviation ministry is planning a new consumer-oriented civil aviation policy, promoting the consolidation of domestic private carriers.
RADHAKRISHNA RAO / BANGALORE
Source: Flight International
