New Delhi, April 18: The Centre today cleared a Rs 1,542-crore project to modernise the Calcutta airport and asked the Airports Authority of India (AAI) to handle the job.

“The infrastructure committee, headed by Prime Minister Manmohan Singh, gave its formal approval to the plan. Work will start in the next few months,” civil aviation minister Praful Patel told reporters after the meeting.

Patel’s ministry and the Planning Commission pushed for the modernisation to be given to a subsidiary of the AAI, but the Prime Minister went with the Bengal government’s suggestion that the job should go to the authority itself. “It will be done by the AAI directly. We got the approval to this effect today,” Patel said.

The AAI believed a subsidiary would have created problems as the new company would be treated as a financially weaker entity requiring government approval at every stage. In contrast, the AAI, which enjoys a higher credit rating, can take most decisions at its board level.

The modernisation will be completed in three years. At the end of it, the airport will have new domestic and international terminals, an extended runway and better communication and navigation systems. The swanky 50-ft tall steel-and-glass structure will be capable of handling up to 20 million travellers a year compared with five million now. “We will move the public investment board for clearance and start work,” Patel said.

The new domestic terminal, which should cost Rs 700 crore, will be good enough for 15 million travellers, up from 4.06 million at present. Revamping the international terminal will cost Rs 600 crore, giving it the capacity to handle 5 million travellers, up from 8.2 lakh.

The design of the new terminal, made by Aeroport de Paris, is about to approved. The second runway will be extended from 2,339 metres to 3,239 metres, work on which has begun.

Of the Rs 1,542 crore earmarked for the job, Rs 1,300 crore will be spent on the terminals, Rs 100 crore on the runway and a cargo complex, and Rs 100 crore on communication systems. The money will come from the AAI’s own sources. “I do not envisage any borrowings at present,” Patel said.

On revamping the Chennai airport, Patel said the Tamil Nadu government has been given a month’s time to clarify its position on the land needed for its expansion. “A final decision will be taken only after consultations with the state government, as we did in the case of Bengal.”

Patel admitted to delays in the modernisation of Mumbai airport, but blamed it on the lack of action on slums. “We are seeking the release of salt pan land near the airport in Mumbai for rehabilitation of slum-dwellers. There is a slippage of about six to eight months. There’s no doubt about it. But we will make up for lost time.”