The Managing Director of the country’s first airport under the public-private partnership (PPP) basis on Saturday welcomed the latest decision announced by Union Finance Minister Nirmala Sitharaman to further relax Indian airspace restrictions for civilian flying and auctioning of six more airports on PPP basis.
V.J. Kurian, a former top bureaucrat of the Kerala government and presently the MD of the Cochin International Airport Limited (CIAL), said the decision is a welcome move.
“CIAL in 1993 became the first PPP airport in the country and then we saw similar airports in Mumbai, Delhi and then came other major airports. There are 650 aircraft in the country owned by various airlines and each time they go abroad for maintenance, precious foreign exchange is lost. We at the CIAL started work for the hangar unit in 2006. I see this as a very good step. Once more details come in, we will know more,” said Kurian.
The new decisions were part of the fourth tranche of announcements under the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday.
The Union government has decided to further relax the Indian airspace restrictions for civilian flying and auction more airports on a PPP basis.
The Finance Minister said that six more airports will be put to bid for the second round of bidding for operation and maintenance on PPP basis.
Noting that currently only 60 per cent the Indian airspace is freely available, Finance Minister Nirmala Sitharaman said that the move will bring a total benefit of about Rs 1,000 crore per year for the aviation sector. Optimal utilisation of airspace will lead to a .reduction in fuel use and time, she said.
On the operation and maintenance of airports in PPP mode, the minister said that the bidding process will commence immediately.
She said that additional investment by private players in 12 airports in the first and second rounds are expected to be around Rs 13,000 crore.
Laying down the government’s plan to make India a global hub for aircraft maintenance, repair and overhaul (MRO), she said the tax regime for MRO ecosystem has been rationalised.
As a result of the move, aircraft component repairs and airframe maintenance will increase from Rs 800 crore to Rs 2,000 crore in three years.
Major engine manufacturers in the world would set up engine repair facilities in India in the coming year on the back of the reform measures, she said.
Sitharaman also announced that convergence between the defence sector and the civil MROs will be established to create economies of scale.
Another major result of the decision will be that the maintenance cost for airlines will come down, as per the government.
The decisions are part of the fourth tranche of announcements under the Rs 20 lakh-crore economic package announced by Prime Minister Narendra Modi on Tuesday.