From: http://www.financialexpress.com/fe_full_story.php?content_id=81231
ECONOMY CII for upgradation of aviation infrastructure OUR CORPORATE BUREAU Posted online: Monday, January 31, 2005 at 0000 hours IST NEW DELHI, JAN 30: At a time when the civil aviation sector is poised to play a catalytic role in the country's GDP growth, there is an emerging need to improve the aviation infrastructure and address safety related issues and regulations, Confederation of Indian Industry (CII) has said. According to a paper prepared by CII for a 1% increase in GDP, domestic passengers are expected to increase by 1% and for international passengers, this sensitivity is about 1.3%. Rapid growth and sophistication of the civil aviation sector should become a national priority, given the significant role it is expected to play in the country's GDP growth, it said. Inspite of several new and positive initiatives like opening up of the skies, flexible tariff structure, modernisation and upgradation of airports, among others, the present system suffers from some bottlenecks both in terms of routine aviation operations and policy matters, CII said. A case in point being, CII said, that even though the Airports Authority of India (AAI) is managing 126 airports in the country, 40 airports are non-operational. AAI is spending a considerable amount of money for maintenance and management of these airports. In order to avoid such huge costs, CII has suggested that a economic feasibility report be prepared for all new green-field airport projects. The government should make a special sanction to AAI for construction, management and maintenance cost of such airports, CII said. CII has recommended that a committee should be formed to categorise the aviation and non-aviation related activities and also to examine the royalty charged by AAI on the gross turnover. It has suggested a facelift for the country's airports and the need to generate more revenues from non-aeronautical services such as duty free and recreational activities. Expansion and development of international airports would enable growth in tourism business, it said. In addition to this, CII has suggested that there is a need to facilitate the rapid growth of domestic aviation to open up all areas of the country to passengers as well as cargo and courier services. This would call for parallel expansion and development of airports at all state capitals and also major tourist destinations, which are not presently covered, CII said. In addition to this, CII said that in the proposed leasing of the Indian international airports, the emphasis should be on quality and international brand equity of the airport operator, to whom these airports are to be leased out, and to their ability to line low-cost, long-term financing that is needed to fund the expansion and upgradation.
