Home Economy Nagpur airport gets nod for upgrade, cargo hub

Nagpur airport gets nod for upgrade, cargo hub


New Delhi : The cabinet Thursday decided to give permission to upgrade the Ambedkar International Airport at Nagpur into a world class aviation hub for passengers and cargo at a cost of Rs.26 billion ($650 million) with the status of a special economic zone.

The cabinet, however, did not take any decision on increasing the foreign investment limit in the civil aviation sector in the country from 49 percent to 74 percent, as some sections of the industry demanded.

The cabinet meeting, presided over by Prime Minister Manmohan Singh, also gave a nod for a new airport at Kannur in Kerala under the public-private partnership, officials in the civil aviation ministry said.

They said the airport at Nagpur in Maharashtra will be upgraded under a new joint venture company that is to be formed with the Airports Authority of India (AAI) as one of its promoters.

The Nagpur airport, which consistently makes losses, will be transferred to the joint venture at an annual lease rent of just one rupee a year for 30 years, in accordance with a pact signed two years ago.

The infrastructure and security will remain with government agencies.

Officials said the Maharashtra government has agreed to waive the stamp duty that is payable while transferring the airport from AAI to the joint venture, so as to lift the economy of the backward Vidharbha region in which the city is located.

“Nagpur is geographically placed at the centre of India and is best suited for upgrade into a hub for both cargo and passenger traffic. It also falls on the international flying route of India,” a senior aviation ministry official.

According to the officials, the airport will also benefit from the Seattle-based Boeing’s plans to set up a maintenance, repair and overhaul facility at Nagpur with an initial investment of about $100 million.

The airport will also have other infrastructure like inland container terminals, a truck terminal, financial institutions to provide fiscal logistics, convention centres and repackaging units to help the exporting community.

The officials said a major impediment to the airport’s upgrade was removed when the Indian Air Force, which has 278 hectares of land adjacent to the site, offered to move elsewhere if new infrastructure and runway was built for its use.