Ownership and Management

1.      The Constitution of India refers to civil aviation as a subject in the Central List and is therefore within the legislative competence of Parliament. The Aircraft Rules, 1937 permit airports other than Government airports to be owned by citizens of India or companies or corporations registered and having their principal place of business in India. Thus the legislative framework for privatization of airports already exists. In fact, some airports are already owned by State Governments, private companies and even individuals.

2.      What is needed now, in view of the worldwide thrust towards corporatization and privatization of airports, is a strategy that permits utmost latitude in the patterns of ownership and management of airports in the country. Thus, airports may be owned by the Central Government, PSUs, State Governments, Urban local bodies, private companies and individuals, as also by joint ventures involving one or more of the above. Similarly, it would be best to keep all the options open in respect of the management of airports or parts of airports. These could be on Build-Own-Transfer (BOT), Build-Own-Lease-Transfer (BOLT), Build-Own-Operate (BOO), Lease-Develop-Operate (LDO), Joint Venture, Management Contract or Wrap-around Addition basis. In each individual case, the exact pattern could be negotiated, depending on the circumstances.

3.      In the case of high-cost projects involving international hubs, Government may seek international or bilateral cooperation with countries having the requisite expertise and financial strength. The actual implementation of the projects would be entrusted to consortia interested in turnkey execution on a joint venture basis.

4.      Foreign equity participation in such ventures may be permitted up to 74% with automatic approvals, and up to 100% with special permission. Such participation could also be by foreign airport authorities.

5.      It may be clarified that the normal procedures of licensing of airports by the DGCA would continue to apply in accordance with the laid down regulations.