Saturday, 6 July 2013

AAI to issue Rs 1,000 crore tax-free bonds to develop airports

By PTI | 5 Jul, 2013, 05.28PM IST

NEW DELHI: Days after the government's move to construct 51 low-cost airports across the country, the Airport Authority of India (AAI) has decided to issue tax-free bonds worth Rs 1,000 crore in the current financial year. 

"The amount realised will be used to finance development of small airports. It would strengthen the financial position of AAI to build these airports," AAI Chairman V P Aggarwal said here. 

Of the 51 low-cost airports, AAI was planning to start work on 15 airports this calender year itself, he said, adding that an inter-ministerial group (IMG), set up for this purpose, has discussed the issue of appointing a consultant at their first meeting yesterday. 

The government had last week decided to set up the 51 airports to enhance air connectivity to small cities in Andhra PradeshJharkhandBihar, Punjab, Uttar Pradesh, Assam,Arunachal PradeshMadhya Pradesh, Rajasthan and Maharashtra. 

Those investing in these bonds, which normally have a long-term maturity plan like a decade, would get tax benefits. In this year's budget speechFinance Minister P Chidambaram had said that state-run bodies like AAI could issue such bonds up to Rs 50,000 crore. 

Apart from the low-cost airports, construction rights for eight greenfield airports are likely to be awarded this year under public-private partnership (PPP) mode for Navi Mumbai, Juhu, Mopa (Goa), Kannur, Rajguru Nagar Chakan at Pune, Sriperumbudur, Bellary and Raigarh. 

Aggarwal said the airports in difficult and remote places like in the northeast, would be constructed by AAI as private parties would not want to go there. 

The planning for these projects would be in coordination with the state governments and with their contribution, he said. "Start of construction will depend on how fast the state governments give us land."

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