Gandhinagar: Gujarat cabinet chaired by Chief Minister Vijay Rupani has today approved Memorandum of Understanding(MoU) for the union Civil Aviation Ministry’s Regional Conenctivity Scheme, in order to fast-track the development of its smaller airports and providing incentives to smaller airlines.

With this gates have opened for a tripartite MoU to this effect which will be signed between he Ministry of Civil Aviation, the Gujarat government and the Airports Authority of India.

Union Civil Aviation minister Ashok Raju is visiting Gujarat capital tomorrow in this connection. He is going to interact with media in the morning at Gandhinagar.

Once the MoU is signed, the government of India will be able to fast-track the development of 11 airports to make them ready for regional connectivity in the state. The 11 airports are Bhavnagar, Porbandar, Bhuj, Keshod, Kandla, Deesa, Amreli, Mahesana, Mandvi, Jamangar and Surat. The airports operated by the AAI will be easier to develop than the abandoned airstrips which the government plans to revive and greenfield airports it plans to set up.

Maharashtra was recently the first state to sign such MoUs after Civil Aviation Ministry announced the aviation policy early this year.

An active state-Centre relation is integral to the scheme under the policy 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.

According to Deputy Chief Minister Nitin Patel Gujarat government will have to contribute 20% assistance while the central government wiwll contribute 80% assistance to airlines operator as viability gap funding to ensure maximum Rs 2500 per hour air fare on one side journey. Gujarat government will provide security, fire fighting etc services and when needed offer land for free. VAT on Aviation Turbine Fuel which is 5% at present will be taken down to 1%. Power, water etc facilities will be offered at discounted rates.

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.

DeshGujarat