Indian airspace to be freed further, more airports for PPP auction


New Delhi, May 16 (IANS): The Union government has decided to further relax the Indian airspace restrictions for civilian flying and auction more airports on a PPP basis.

Speaking to the media here, Finance Minister Sitharaman said that six more airports will be put to bid for the second round of bidding for operation and maintenance on Public-Private Partnership (PPP) basis.

Noting that currently only 60 per cent the Indian airspace is freely available, Finance Minister Nirmala Sitharaman said that the move will bring a total benefit of about Rs 1,000 crore per year for the aviation sector.

Optimal utilisation of airspace will lead to reduction in fuel use and time, she said.

On the operation and maintenance of airports in PPP mode, the minister said that the bidding process will commence immediately.

She said that additional investment by private players in 12 airports in the first and second rounds are expected to be around Rs 13,000 crore.

Laying down the government's plan to make India a global hub for aircraft maintenance, repair and overhaul (MRO), she said the tax regime for MRO ecosystem has been rationalised.

As a result of the move, aircraft component repairs and airframe maintenance will increase from Rs 800 crore to Rs 2,000 crore in three years.

Major engine manufacturers in the world would set up engine repair facilities in India in the coming year on the back of the reform measures, she said.

Sitharaman also announced that convergence between defence sector and the civil MROs will be established to create economies of scale.

Another major result of the decision will be that the maintenance cost for airlines will come down, as per the government.

The decisions are part of the fourth tranche of announcements under the Rs 20 lakh-crore economic package announced by Prime Minister Narendra Modi on Tuesday.

  

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