Govt to consider JV route for Kolkata, Chennai airports

BY A CORRESPONDENT
June 24, 2006

A proposal to modernize the Kolkata and Chennai airports through the joint venture route is being considered by the Centre. Potentially volatile in terms of how the Left may receive it, the proposal suggests that a private consortium act as the lead partner in a joint venture, with the Airports Authority of India (AAI) acting as the minority shareholder.

The proposal also suggests that the AAI might get only 10 per cent of the gross revenue share from the two airports. In contrast, the AAI gets 45.99 per cent in Delhi and 38.7 per cent in Mumbai.

According to sources, "The equity infusion by AAI for Chennai and Kolkata joint venture companies has been estimated as approximately 50 per cent of the equity investment in case of Delhi and Mumbai. The equity infusion by AAI during 2008-09 to 2013-14 will be Rs.150 crore."

Together with borrowings, the equity share of private partners is estimated at Rs.5, 500 crore, suggesting that the AAI would retain a minority stake in both ventures.

Earlier, it had already been cleared by the Prime Minister's Committee on Infrastructure that the modernization process of the two airports would follow the Public-Private-Partnership route, similar to that followed in the case of the Delhi and Mumbai airports.

Civil Aviation Minister Praful Patel has however clarified, following Left agitation, that the modernization route would have to be approved through talks with the Left parties and the DMK, in the respective states.

The estimated deadline for completion of the two projects is March 31, 2008. The investment amount is likely to be in the order of Rs.5,700 crore between 2008-09 and 2013-14.