SME TImes News Bureau | 19 Jan, 2017
The central government on
Wednesday said it has received an 'encouraging' response to its
regional connectivity scheme (RCS) with 45 initial proposals coming
in from 11 bidders covering more than 200 regional routes.
According
to the Ministry of Civil Aviation, the state-owned Airports Authority
of India (AAI) -- the implementing agency for the RCS -- had received
initial proposals which covered as many as 65 airports, of which 52
are unserved and 13 are underserved airports.
The last date
for the submission of initial proposals was January 16,
2017.
Commenting on the industry's response to the RCS, Civil
Aviation Minister P. Ashok Gajapathi Raju said the proposals
represent a significant step towards the vision of 'connecting the
un-connected and serving the un-served'.
"The scheme is
likely to give a major boost to tourism activities and employment
generation in hinterland and tier-II and tier-III cities," the
minister was quoted as saying in a statement.
The statement
pointed out that the last date of counter-bids submission against
these initial proposals is February 1.
"The routes or
networks will be awarded to the bidders who quote the lowest
requirement of viability gap funding (VGF) against such routes,"
the statement elaborated.
"To ensure that operations on
ground start with minimum time-gap after the bidding is completed,
parallel action has also been initiated by the Ministry of Civil
Aviation with AAI, state governments, DGCA (Directorate General of
Civil Aviation) and the Bureau of Civil Aviation Security."
Last
year, the government had launched the RCS which is a key component of
the National Civil Aviation Policy (NCAP), whose main objective is to
"enhance regional connectivity through fiscal support and
infrastructure development."
The objective of RCS
christened as UDAN (Ude Desh ka Aam Naagrik) is to enhance air
passenger traffic in the country by stimulating demand on regional
routes.
The UDAN scheme will be in operation for a period of
10 years.
The operations under the scheme are intended to
provide air connectivity to un-served and remote routes with airfare
being capped at Rs 2,500 for an hour's journey of around 500 km.
The
allocation of routes under the scheme will be based on a reverse
bidding mechanism, with selected airlines getting a VGF, apart from
various other financial concessions for a period of three years.
The
central government is expected to provide concessions in the form of
reduced excise duty and service tax, state governments will have to
lower the VAT (value added tax) on ATF (air turbine fuel) to one per
cent or less.
Besides, the state governments would not charge
on security and fire services and electricity, water and other
utilities would be provided at concessional rates.
On their
part, airport operators shall not impose landing and parking charge
and terminal navigation landing fees. They would also offer discounts
on route navigation facility charges.