The government on Wednesday decided to put a 49 per cent cap on foreign direct investment in the modernisation of Mumbai and Delhi airports and extended the last date for putting in expression of interest to July 20.
Announcing this, Civil Aviation Minister Praful Patel told a news conference in New Delhi that the Airports Authority of India, as proposed earlier, will retain 26 per cent equity in the special purpose vehicle to be set up for this purpose.
Besides, the Indian companies and financial institutions will at least have a 25 per cent stake in the SPV to ensure that 51 per cent equity is with the Indians.
Seeking to allay fears of any reversal of reforms in airports modernisation, Patel said, "They were on course and there was no change in the earlier proposal to set up a SPV for this purpose with 26 per cent equity (of AAI)."
He also said the Indian companies and financial institutions together could hold the remaining 74 per cent. Of this 74 per cent, the government has decided to allow FDI of upto 49 per cent considering the huge capital involved and the high technology required for the development of the airports.
"This policy of (capping foreign investment at) 49 per cent is followed in many countries across the world which have built modern airports," he said.