‘AAI plans to invest `17,500 cr in 5 years to upgrade infrastructure’

Civil Aviation Minister ASHOK GAJAPATHI RAJU in an interview with SUNNY VERMA said apart from the Aai-owned airports, development of state-owned Shirdi airport is in an advanced stage, while the Andhra Pradesh government is planning to build one in Visakh

INTERVIEW WITH CIVIL AVIATION MINISTER

When do you plan to have the first flight under the Regional Connectivity Scheme (RCS), which offers a subsidised fare of Rs 2,500 per an-hour flight?

I think that February will pass in the reverse auction process and by March, the scheme should start. The response is good. We hope that the low-hanging fruit — the inoperative airports — will bounce back. After all, the purpose is to connect unconnected areas with unserved airports.

Will the infrastructure at unserved airports be ready?

In terms of infrastructure, the total list of 400 airports will not be available. But 31-32 airports that are inactive are low-hanging fruits. So, some flights will start from there. Now, it’s a demand-driven scheme. So, airlines have to express seriousness in connecting that area. Once that is done, the Airports Authority of India (AAI) will restore the AAI airport, if they are non-aai airports, the owners will have to restore it.

Apart from Air India have other existing major players put in the bids?

Lot of players. I would think NSOPS (Nonscheduled Operators Permit) have taken the advantage of this. That’s what it looks like because we expressed readiness that they can come in.

Some airlines have gone to the court over the government’s decision to impose a levy on major flights, in order to subsidise regional flights. What are you doing to resolve this issue?

We are a democratic country. We work under the Constitution. Even a murderer is entitled to go to court. Governments are not expected to do something that is illegal. So, whenever we put a levy, we have a law department advising us. They have advised us and we have put the levy. Now, someone calls it illegal, courts are there to test it. And, who am I to tell anyone that you do this. We have to proceed according to the law and we are doing so.

Apart from RCS, there is not much to show on airport development side ...

We did a Parliamentary Consultative Committee meeting just 2 days ago, where AAI presented its plan. The AAI is planning to invest Rs 17,500 crore in the next five years for upgrading infrastructure. But this plan by itself will not be adequate as the sector needs to grow at a faster rate. So, (for) infrastructure we will have to see how to mix private investment, and how much can you increase there will be the question.

Shirdi airport, for instance, is owned by the state government. Development of this airport is in an advanced stage. But this will not show up in the AAI’S Rs 17,500-crore plan. So, like this, there will be different projects that will be taken up by the various state governments. For instance, Navi Mumbai, one of the country’s premier cities, has choked itself out. It needs to be developed.

Are there any plans for fresh negotiation of bilateral traffic rights?

Bilaterals were done on a level of equality. Earlier, governments have given away a lot of seats, destinations. In the new policy, we said unless 80 per cent of the Indian (airlines) perform, we are not going to negotiate. But if for some reason, the country gains, those negotiations should be done outside the country, the Cabinet Secretary should take it up. Now, most Indian players are performing. If you look at Emirates vis-a-vis Indian players, earlier when we came in it was all lopsided, in these two and a half years, Indian players have started performing. They (foreign carriers) were asking for more seats from day one, but we said nothing doing because there are lot of seats which have to be performed. Earlier, they were not giving slots (to Indian carriers), playing dirty locally, now they have stopped playing dirty with Indian players, who are now getting slots in Dubai and all.

But new destinations we should be giving to Indian players, they should get an advantage. Are you seeking any funds from the Budget that will be presented next week?

See, the finance minister in the Budget told us that we can go up to 50 airports, which the government of India will fund. But we don’t want to generate non-performing assets. So, we are taking care so that when these assets perform, they contribute to the economy. One direct job here will result in six jobs outside. In passenger traffic we are the fastest growing in the world. Come cargo, we are minuscule. So, attention has to come to cargo also. The AAI now has a whollyowned subsidiary to concentrate on cargo.

Near-miss incidents have gone up in recent months. Does the government plan to do anything about it?

The ratio of number of near misses has come down. Data-wise, it’s is not too worrying. But we would like to avoid it. We want that the regulations should be followed, that extra care has to be taken. But it is nothing to worry about, and I hope we will never reach that level. Indian skies are safe and we want to keep them safe.

Are there any plans for Air India divestment?

Air India is a good airline. Last year, it did not make an operating loss so it is fully capable of coming out. Its books are bad, that’s the negative angle. This is what I have been saying from day one, that I would like Air India to survive, but we cannot commit the taxpayers money for eternity. This is a wrong thing. It has huge debt. All options like debt restructuring which are possible should be explored.

How should aviation sector be taxed under GST? What is your view?

GST (Goods and Services Tax) is becoming a reality but India is a federal structure. So, generally, GST means, they (corporates) would get set offs for their inputs. Now, here in this federal structure, state governments want petroleum products to be kept out of it. That generates one type of problem because state government want petroleum and intoxicants out (of GST). Ok, keep that out but then how do they get the set off. That becomes a double whammy. The issue has to be identified, flagged and the ministry has flagged it with thefinanceministry.theyhavetotakeacallon it, what to do, how to go about it. Anywhere between 40-45 per cent of the operating costs are fuel. If fuel is high taxed and that too with no set offs, they will be in trouble.

What have you suggested to the finance ministry?

What alternatives could emerge have been suggested, but unless a final decision is arrived at, I should not be talking about it.