AAI to spread its wings across SAARC nations, govt looks to boost influence

Representative image of an airport
State-owned airport operator Airport Authority of India (AAI) plans to foray in neighbouring countries to earn extra revenue. Simultaneously, this step is an attempt by the government to increase the nation’s influence in the region.

SAARC is the regional intergovernmental organization and geopolitical union of states in South Asia. Its member states include Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.

“The business development unit of AAI has begun discussions with several countries in SAARC region to pitch how expertise of AAI can help in developing aviation infrastructure in those countries,” said a senior AAI official.

“We have asked the Ministry of Civil Aviation and Ministry of External Affairs to make this a part of the agenda whenever there is bilateral negotiations of India with these countries,” the official added.

As part of this plan AAI will offer to build airport terminals, impart training in terminal and air traffic management, search and rescue operations and steps to increase non-aeronautical revenue.

Among the first projects which may be awarded to AAI is building second airport at Kathmandu.

AAI officials said that the agency which has been managing 125 airports and 26 civil enclaves over the years it has developed expertise in handling airports which can now be used to gain monetary benefit out of it.

The move, officials say is also a part of India’s efforts to build influence in the region and a counter to China’s Belt and Road initiative in the region. Under China’s Belt and Road Initiative (BRI), the country aggressively uses loans and debt restructuring to gain control of strategic ports across the world.

According to a study by aviation consultancy firm CAPA, between 2014 and 2016, China’s total trade volume in the countries along the Belt and Road Initiative exceeded $3 trillion, while its investment in these nations surpassed $50 billion. However, the large China-linked debt burden to promote the Initiative has been a concern.

“AAI along with other infrastructure building agencies like NHAI were asked to explore the opportunity of developing infrastructure in the region. To combat China’s aggressive investments, India, in turn, has upped its aid to its neighbours and is focusing on being more efficient in implementation of its own development projects,” a senior official in Ministry of External Affairs said.

For instance, India’s aid to Nepal has increased to Rs 650 crore in 2017-18, a 73% increase from the previous year allocation.

National Highways Authority of India (NHAI) the government agency responsible to build highways in India has already expanded its business outside India. Last year, it signed a project agreement for upgradation of a highway project in Myanmar.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel