Page 84 - Enhancing innovation and participation in smart sustainable cities
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United for Smart Sustainable Cities
Enhancing Innovation and Participation
Policies and strategies that made it possible
The Ministry of Civil Aviation, Government of India, has taken steps to improve the regulatory environment in the
country. The Ministry has come up with a new civil aviation policy (Vision 2020) which facilitates the establishment
of a new Civil Aviation Authority. Some of the recent policy initiatives implemented are as follows:
FDI investment in civil aviation: In September 2012, an amendment was made in the Civil Aviation policy
that allowed foreign airlines to take equity share in the operating scheduled air transport services,
subject to a limit of 49% of their paid-up capital.
New aviation regulator: A new bill is expected to be introduced in Parliament to establish a new
regulator, to be called the Civil Aviation Authority (CAA) replacing the Directorate General of Civil
Aviation (DGCA). It will have full operational and financial autonomy.
PPP mode for airport development: PPP mode will enable privatization and modernization of airports in
metro as well as non-metro cities, and will give priority to the development of regional and remote
connectivity in the country.
Simplification of building rules near the airport: The Government has approved changes in the bylaws
regulating building activities around airports. The changes are expected to bring increased transparency
and efficiency in the processes of approval for construction of buildings around airports.
The stakeholders involved in the process:
The Government of India
State governments
Private sector enterprises
Financial institutions of India
Foreign direct investors
Enablers that made it happen:
Efficient leadership of Central Government: The Central Government’s commitment to provide a solution
to the resource constraint enabled this process.
Governance (within the city and across all levels of government): The local city and state Governments
were also taken on board.
Financial (e.g. PPP, risk management): The Financial institutions came forward to assist with the process.
This coupled with the policies of the government ensured risk mitigation, which in turn helped in
boosting the confidence of the private enterprises who then willing joined this collaboration.
The contributions of multilateral agencies, such as World Bank, Asian Development Bank (ADB) and
Department for International Development (DFID) in infrastructure development play a key role in
improving the investment climate and fostering private sector participation. There has been a shift in the
funding pattern of multilateral agencies from public sector infrastructure projects to projects which have
private sector participation. These agencies give priority to environment-friendly infrastructure projects.
Multilateral agencies provide financial and advisory support to infrastructure projects. They act as a
stable source of long-term funds and knowledge base with strong PPP experience. They extend technical
assistance (TA) to the governments to help them bring PPPs to the mainstream at the centre and state
level through capacity building, e.g., establishing PPP cells in various states. Over the years, they have
come up with new ways of providing financial assistance for infrastructure development, such as through
multi-tranche financing facilities and local currency loans.
This type of solution in PPP funding of the airports is replicable.
Key upcoming PPP projects are:
Seven Greenfield airports in Andhra Pradesh: New airports will be developed through the PPP mode and
will entail a private investment in the range of INR 10 billion–INR 20 billion each. The Government will
also offer concessions, including land, water, power and approach roads.
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