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New aviation policy will help Tata projects

The draft civil aviation policy clearly indicates the government's efforts to salvage the Tata-Singapore Airlines joint venture plans for the Bangalore airport project and a domestic airline.

According to aviation sources, the new policy -- now under active consideration of the civil aviation ministry -- categorically states that existing or new airport projects could be undertaken with or without foreign equity on 'Built, Operate, Own, and Transfer and Built, Operate, and Own basis.

The policy further underlines ''the construction of new projects may be undertaken by private sector on their own or with foreign equity participation up to a maximum of 40 per cent from any sources on BOO or BOOT basis.''

In the domestic aviation sector, the new policy clearly indicates that domestic operators shall be allowed to have ''foreign equity up to a maximum of 40 per cent irrespective of the source of the equity.'' This is a deviation from the earlier policy which allowed only non-resident Indians to have 100 per cent equity and barred foreign air carriers and airports from holding equity either in the domestic airlines or airports.

The current civil aviation policy was cleared by the Cabinet in April under the prime ministership of H D Deve Gowda. The policy was announced by Civil Aviation Minister Chand Mahal Ibrahim.

The draft policy has been circulated amongst all airlines and other civil aviation departments for their comments.

However, the new policy refers to Indian entitlement to operate services to foreign destinations limiting to the extent that as far as possible these services would be undertaken by ''Air-India and Indian Airlines. The unutilised rights may, however, be granted to other scheduled operators who meet the criteria and minimum requirements for international operations."

Referring to the air services agreement, the draft policy said, ''All countries of the world zealously protect their individual rights and interest and therefore regulate operations of air services by foreign airlines to and from their territory. For example, it has taken India for more than four decades to get more than two entry points in the United States, and this has been possible only after India has been made to agree to permit a large number of US airlines to operate unlimited services.''

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