Stuck for 7 years, govt decides to rope in AAI for Kushinagar airport

While the state government is likely to bear about 40 per cent of the project cost, along with providing land on lease, logistic support and concessions to other investors, the Centre has already approved 20 per cent viability gap finding for the airport. The AAI will fund the rest. A Special Purpose Vehicle is also likely to be formed, where both the state and AAI will have share.

[related-post]

A senior official said the project will be given to AAI on ‘Design, Build and Operate’ basis and state government is waiting for a fresh estimated — to be provided by AAI — before takes the next step.

In a recent state Cabinet decision, the government has decided to handover the project to the state civil aviation department from tourism department, which was handling the project for the last seven years.

Conceived in 2008 during the Mayawati regime, Kushinagar International Airport is integral part of the Buddhist circuit, as Buddha is believed to have spent maximum part of his life and attained “Mahaparinirvana” there. Pilgrims and tourists from not only India but also from countries like Thailand, Singapore, Malaysia, China, Japan and the Middle East visit the place regularly.

There is existing airstrip of 2,100 m in Kasia area of Kushinagar, which will be upgraded up to 3,200 m to meet international standards. The project, initially estimated to come up over 700 acres for Rs 750 crore, it was revived in 2012 with the cost Rs 350 crore and land requirement of 550 acres only. After initial protests by farmers, the government was able to acquire 584.65 acres in 2011-12.

The project has already received clearances from the Union Civil Aviation, Environment and other ministries, along with sanction from the Union Finance Ministry. But despite several attempts to reduce the cost and the size of the project, the government could not convince private players about its viability. Sources said lack of facilities in the near vicinity and doubt over the actual footfall has discouraged private players. The airport is also unique in a way that even before finalisation of details, the Centre has notified User Development Fee of Rs 1,300 for outbound international passengers and Rs 200 for outbound domestic passengers. It was also the first airport project in the country for which the Centre had agreed for viability gap funding of 20 per cent to make it viable.