India to construct 100 airports worth $60 billion

India plans to construct 100 new airports with an investment of close to USD 60 billion (about Rs 4.2 lakh crore) in the next 10-15 years, Civil Aviation Minister Suresh Prabhu said Tuesday.

Amid the country’s domestic aviation sector recording double-digit growth for more than three years on the back of rising demand, the government is working on ways to bolster the infrastructure for the sector.

«We have plans for 100 new airports to be built in India in the next 10 to 15 years with investments of almost close to USD 60 billion,» the minister said at a conference here.

Currently, the Airports Authority of India (AAI) is managing more than 120 aerodromes.

«We plan to put it in the public domain for anyone interested in building infrastructure or airports will get an advanced intimation on where it is going to happen… Our strategy is clear. We have to do it in a PPP mode. We need to have private sector participation,» Prabhu said.

He also said that the government is working on a cargo policy.

The government plans to have a pre-determined tariff structure linked to inflation for greenfield airports.

Currently, there is cost plus tariff structure wherein the rates for an airport are determined every five years, which is known as the concession period.

Against the backdrop of the government proposing a new tariff structure for greenfield airports, the International Air Transport Association (IATA) has raised concerns about it.

The IATA is a global grouping of more than 280 airlines.

«We believe that it makes no sense to fix a per passenger yield at the outset of a concession contract that is set to run for four decades.

«Flexible parameters should be set that are regularly reviewed by a regulator. As we know from bitter experiences in Brazil, Australia and elsewhere that selecting the company that simply proposes the highest concession fee does not yield good long term results,» IATA Director General and CEO Alexandre de Juniac said Tuesday.

The IATA has projected that by 2037, there would be almost 520 million passengers flying to, from and within India each year.

«In 2010, 79 million people travelled to/ from/ or within India. By 2017 that doubled to 158 million. That number is expected to treble to 520 million by 2037,» it noted.

The country is also expected to overtake Germany, Japan, Spain and the UK within the next ten years to become the world’s third largest air passenger market.
Source: The Economics Times. India

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