Maharashtra first to sign up for regional connectivity scheme

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MUMBAI: Maharashtra on Tuesday became the first state to sign up for the civil aviation ministry’s regional connectivity scheme, fast-tracking the development of its smaller airports and providing incentives to smaller airlines.

A tripartite memorandum of understanding (MOU) to that effect was signed between the ministry of civil aviation, the Maharashtra government and the state-run Airports Authority of India.

Aviation minister Ashok Gajapathi Raju said the government will fast-track the development of airports at Shirdi, Nanded, Akola, Jalgaon, Solapur and Kolhapur to be readied for regional connectivity in the state. These are airports operated by the AAI, which Raju said should be easier to develop than the abandoned airstrips which the government plans to revive and greenfield airports it plans to set up.

An active state-Centre relation is integral to the scheme announced earlier this year. An airline signing up for it will connect small towns in flights of about 1 hour with ticket charges capped at Rs 2,500. As the fares are low and wouldn’t cover costs, there will be viability gap funding, 20% of which will be borne by the governments of states which are part of the scheme. There will also be a levy on scheduled carriers flying on trunk routes such as Delhi-Mumbai.

State governments signing up for the scheme shall also implement incentives such as zero airport charges, reduced service tax on tickets (on 10% of the taxable value) for one year initially and also reduced excise duty at 2% on jet fuel.

Maharashtra’s participation in the plan comes at a time its main airport, also the country’s second busiest – Mumbai — is severely congested and much delayed plans of a second airport in Navi Mumbai show no signs of being expedited.

The airport is struggling with congestion and paucity of space, leading to widespread disruption of schedules. DGCA data for July showed airlines clocked their worst on-time performances – most were delayed — in Mumbai out of the six major metro airports in the country.

“The airport is choking itself out,” said Raju.

A Rs 14,573 crore planned project for an alternate airport at Panvel, Navi Mumbai, on the outskirts of the city has been delayed for close to a decade now due to problems of land acquisition and environmental clearances and continues to be pushed back.

The nodal body, City and Industrial Development Corporation (CIDCO), has now extended the deadline for submissions to the Request for Proposals (RFP) to January next year from October 2016.

Outside Mumbai, the two active airports are Pune and Nagpur of which the former is a civil enclave. Aurangabad handled a handful of flights.

India plans a total of 160 airports and airstrips in the country, finance minister Arun Jaitley had said in the government’s latest budget. Of that, 10-15 airports will be developed in the next one year and 50 in three years, Raju said.