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Draft aviation policy lays stress on pvt investment

Ashwini Phadnis

NEW DELHI, Jan. 18

THE Government is planning to frame guidelines for utilisation of vacant land belonging to the Airports Authority of India (AAI) and also attract private sector investment in non-aeronautical activities near airports to boost revenue, as part of the new aviation policy.

Reduction of the Government's equity in organisations such as Air India, Indian Airlines, Pawan Hans Helicopter Corporation and Hotel Corporation of India has also been proposed in a draft policy being considered by the Ministry of Civil Aviation. The po licy is expected to be announced shortly.

According to the draft policy, wet leasing of aircraft by air-operators will be permitted. It also seeks to grant freedom to operate non-revenue and passenger charter flights to foreign destinations. However, grounding/confiscation of leased aircraft by the regulatory authority for recovery of outstanding dues will be prohibited, according to the draft policy.

Air transport service: The policy stated that no minimum number of aircraft is required for an air-operator to start an air transport service. It added that route dispersal guidelines shall be dynamic and periodically reviewed at fixed intervals with a v iew to promoting air transport services in remote areas.

Increased private sector participation will be a major thrust area in the civil aviation sector for promoting investment, improving quality, efficiency and increasing competition, the draft policy stated.

Employees' stock option: It added that the Government would encourage employee participation through issue of shares and employees stock option plan (ESOP). Besides, the policy stated that private sector investment in non-aeronautical activities such as providing shopping complex, golf course, entertainment parks and aero-sports centres near airports will be encouraged to increase revenue, improve viability of airports and to promote tourism.

Use of vacant lands: The policy also suggested the formulation of new guidelines for utilising vacant land belonging to the AAI, including land at airports where there is no likelihood of future use for civil aviation purposes. This, the draft noted, sho uld be utilised for other commercial purposes either by the AAI or by the State Governments. However, at airports where there is a likelihood of future use for civil aviation purposes, it may be handed over to the State Government for upgradation/mainten ance for civil aviation purposes.

In the domestic air transport sector, the draft policy aimed at providing safe air transport services to the maximum number of people at economic prices by removing all hindrances in private sector participation. ``Wherever these services are not cost-ef fective, efforts will be made to provide direct subsidy to encourage such services,'' the draft stated.

Coordination panels: To smoothen the functioning of the civil aviation sector, the draft policy suggested the creation of an inter-ministerial standing committee for co-ordination between the ministries of commerce, tourism, industry, railways, surface t ransport, defence, home affairs (immigration and security), finance (customs) and external affairs.

It also proposed the creation of a statutory autonomous civil aviation authority (CAA), which will set the standards for various agencies and personnel of the sector, issue licences to agencies and personnel, and ensure that these agencies and personnel continuously fulfill the standards.

The draft policy seeks to encourage private sector participation in existing maintenance infrastructure of Indian Airlines and Air India, including the Jet Engine Overhaul Complex and new maintenance facilities, including engine overhaul and repairs with up to 100 per cent foreign equity.

It stated that the Government will initiate disinvestment programme in Air India by giving the strategic partner a free hand in running the airline through shareholders' agreement. It added that substantial ownership and effective control will remain wit h Indian nationals, including the Government.