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Sops for greenfield airports

New Delhi, Oct. 23: A ministerial panel today finalised guidelines for greenfield airports that allow state governments to give land, real estate development rights and fiscal incentives to developers.

The sops, which are part of the guidelines, come at a time when there’s a raging debate on the acquisition of land by states for special economic zones.

An inter ministerial group, set up by Prime Minister Manmohan Singh in April, today announced the guidelines. These will now be vetted by the cabinet.

Among the proposals is a steering committee, under the civil aviation secretary, to co-ordinate the clearances required for an airport.

Such a body is necessary to speed up the process of getting a licence. A developer of an airport needs clearances from many entities. These include agencies connected with air traffic rights, security, customs and immigration.

Officials of the state-run Airports Authority of India (AAI) believe they are at a disadvantage vis-à-vis private parties. The policy says the AAI should “preferably” construct airports under the private-public-partnership principle. In such cases, the land for the airport will have to be provided by the AAI.

According to the officials, this seems to imply that the AAI can build airports on its own only in remote and unviable areas where “no one else would like to go … the policy is quite biased against us and creates an unequal playing field.”

The officials said they were trying to contest this proposal. State governments can set up airports on their own, through a designated entity or in a joint venture where the private partner will be selected through competitive bidding. States can offer land — concessional or otherwise — real estate development rights and fiscal concessions to the private partner.

Several private greenfield airports have either come up or are being planned. The government allows up to 100 per cent foreign direct investment in such airports.

Among global players interested in the venture are Fraport of Germany, which runs the Frankfurt airport, Malaysia Airport Holdings Berhad and Singapore’s Changi Airport Authority.

Domestic companies such as Hyderabad-based Maytas Infra Ltd are also keen to enter the sector.

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