‘No need for more world-class airports’

Existing 17 underperforming: Plan Panel.

Written by Priyadarshi Siddhanta | New Delhi | Published: November 19, 2014 12:48 am

The airports at Bhopal, Raipur and Indore would have to wait longer to get the ‘world class’ tag as the 17 existing international airports are nowhere near realising projected traffic volumes, the Planning Commission has told the Prime Minister.

In a presentation to Modi on Wednesday on the achievements vis-a-vis targets for the infrastructure sectors so far, the panel said that adding three more to that list is needless.

“Out of 17 international airports, five have only a small volume of traffic. Airports with adequate traffic potential only will be made into international ones. These three are not being declared as international airports,” according to the presentation made to the Prime Minister.

The aviation ministry had told the Lok Sabha on July 14 that, Bhopal, Raipur and Indore would be developed as world-class airports. So Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad airports only would be developed as major international hubs in future.

Of the airports to be developed through operation, maintenance and development (OMD) model, he commission said Ahmedabad and Jaipur are to be developed through the public private partnership (PPP) mode while Kolkata and Chennai to be developed through management contracts. “The Request For Qualification (RFQ) will be issued by December 31, 2014,” the planning body told Modi.

Contracts have been awarded for only five of the 50 Tier-II and Tier-III cities targeted by the civil aviation ministry. They are Hubli, Belgaum, Kishangarh, Jharsuguda and Tezu. “The aviation ministry is re-considering the need for other airports in these cities,” the panel told the Prime Minister.

In its presentation the Commission argued that the prices of aviation turbine fuel (ATF) is as high as 40 per cent due to high rates of sales tax and value added tax (VAT), which is as high as 29 per cent in some states. “It is therefore proposed that sales tax and VAT on ATF be reduced to 4 per cent when Goods and Services Tax is implemented,” the commission said.

Endorsing the commission’s contention, civil aviation minister Ashok Gajapati Raju on Monday said the government has been asking the states to lower taxes as fuel costs are close to 40-45 per cent of an airline’s total operational cost, given that petroleum prices are on the decline globally.

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