Maharashtra becomes first state to sign MoU with Centre, AAI to develop 10 airports under RCS

August 24, 2016

Maharashtra Government has signed a Memorandum of Understanding with the Union Civil Aviation Ministry and Airports Authority of India (AAI) to develop 10 airports as part of the Centre’s Regional Connectivity Scheme.
The MoU was signed in the presence of Union Civil Aviation Minister Ashok Gajapathi Raju and Maharashtra Chief Minister Devendra Fadnavis.
With this Maharashtra became first state in the country to formally to provide the concessions required from the State Governments in the Regional Connectivity Scheme.
Key Facts

These 10 airports include Shirdi, Gondia, Amravati, Jalgaon, Nashik, Solapur, Nanded, Kolhapur, Ratnagiri and Sindhudurg.
The MoU aims to facilitate regional air connectivity by making air travel affordable and move aviation sector in Maharashtra to next level.
As per the MoU, Central Government will provide funds and also assist the Maharashtra Government in developing essential infrastructure for developing these airports.
State government will provide essential land free of cost and will also reduce the Local Body Tax (LBT) on air fuel from the existing 10% to 1% for a period of 10 years.
It will also provide electricity, water and necessary facilities at concessional rates. Airports will also be provided with roads, rail and waterway connectivity.

About Regional Connectivity Scheme

The provision of Regional Connectivity Scheme (RCS) has been mentioned in the National Civil Aviation Policy (NCAP) 2015.
Objective: To make flying affordable for the masses, to promote tourism, increase employment and promote balanced regional growth.
It also aims to boost civil aviation sector by reviving of un-served or under-served airstrips/airports. Only 75 out of 476 airstrips have scheduled operations.
Implementing agency: Airport Authority of India.
RCS route: It will include (i) un-served airports i.e. airports where there is no scheduled commercial flight (ii) under-served airports i.e. airports which have 7 or less scheduled commercial flights per week.
These routes will cover a length between 200 to 800 km. But this criteria will not apply to hilly areas, islands, North-east region and for helicopter operations.
Subsidy: Central Government will subsidise 80% of the cost for revival of airports, while the states will meet the rest under the viability gap fund (VGF). In the case of the Northeastern states, the central subsidy will be 90%.
The RCS also stipulates that the air tickets will be capped at Rs 2,500 under a one-hour flight and the VGF will take care of the rest of the operational cost.
Besides, a Regional Connectivity Fund (RCF) will be created to subsidise the operation of the RCS.