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Draft State Civil Aviation Promotion Policy of Uttar Pradesh 2017

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Draft State Civil Aviation Promotion Policy of Uttar Pradesh 2017 DRAFT Draft -01/08/2017 State Civil Aviation Promotion Policy of Uttar Pradesh 2017 DRAFT DRAFT Draft State Civil Aviation Promotion Policy of Uttar Pradesh 2017 Civil Aviation Promotion Policy of Uttar Pradesh 2017 Table of Contents 1. Introduction 2. Objectives of Civil Aviation Promotion Policy of UP 2017 3. Current scenario of Aviation in U.P. 4. Development of airport and related infrastructure 4.1. Incentives under IIEPP 2017 4.2. Upgradation of airstrips into No-Frills Airports/civil airports 4.3. Aircraft manufacturing and procurement 4.4. Aviation Support Infrastructure 4.5. Connecting U.P. with international destinations 5. Development of air cargo hubs and MRO facilities 6. Development of Human Resources for Civil Aviation 7. Improving connectivity at non-RCS airports 8. Focus and incentives under Regional Connectivity Scheme (RCS-UDAN) 8.1. Expectations from state government under RCS scheme 8.2. RCS MoU between State Government, Government of India, Airport Authority of India 8.3. Enabling Infrastructure 8.4. Enabling eco-system 8.5. Fiscal incentives 8.6. Summary of Incentives and concessions for RCS routes/airports Annexure- I.UP : Details of main airports/airstrips in Uttar Pradesh Annexure- II.UP : Examples of possible newDRAFT routes proposed to be included in RCS 2nd bidding 2 DRAFT Draft State Civil Aviation Promotion Policy of Uttar Pradesh 2017 1. Introduction Civil aviation sector is an enabler of economic growth and development of the state and the country. To facilitate the inclusive growth in this sector, Government of India has launched National Civil Aviation Policy 2016 and Regional Connectivity Scheme (RCS) with a vision to connect the underserved as well as unserved airports/airstrips/locations through incentives from central and state governments. Such airports/locations are marked as RCS airports/locations. State governments are expected/encouraged to identify the locations as well as the routes and to declare incentives beyond the mandates envisaged in RCS to attract the airlines and start new routes. There is no comprehensive state civil aviation policy in U.P. so far. First round of bidding under RCS has not been very successful from U.P. perspective. There is a need to develop state civil aviation policy to attract the airlines/air operators in U.P. to cover underserved and unserved airstrips and cities during second round of RCS bidding. Civil Aviation Promotion Policy of Uttar Pradesh 2017 intends to provide the necessary direction for the growth of this sector in the state. 2. Objectives of Civil Aviation Promotion Policy of UP 2017 To create a conducive business environment, provide adequate support for the development of robust civil aviation infrastructure and to aid in attracting investments to realize the untapped potential in the aviation sector To improve the air connectivity through development of new routes under RCS by providing incentives and also to facilitate inter-connectivity of non-RCS airports of U.P. To realize the full potential of tourism by linking major state tourist destinations with rest of India and the world. DRAFT To facilitate trade and generation of employment opportunities. To give a boost to agro-exports, other perishable goods, manufacturing and e-commerce businesses in UP by supporting the development of air cargo hubs and fulfillment centers. To support the growth of aviation sector by developing human resource and generate direct, indirect and induced employment opportunities in the sector To facilitate the growth of MRO facilities in the state. 3. Current scenario of Aviation in U.P. The passenger air traffic in Uttar Pradesh has grown in the year 2016-17 by 26% to 4.2 million1 passengers on a year on year basis whereas air cargo has witnessed a negative growth of 2% to 4.8MMT (million metric tons) during the same period. According to Census of India 2011, the approximate population of Uttar Pradesh is 199.8 million and 1 Air Traffic Statistics, Airport Authority of India 3 DRAFT Draft State Civil Aviation Promotion Policy of Uttar Pradesh 2017 the corresponding per capita air trips would be an approximate 0.021 reflecting the immense untapped potential in air transport sector in the state. Currently, in Uttar Pradesh the following five airports are providing intra-state and inter- state air connectivity with Lucknow airport serving 95% of the passenger air traffic demand in Uttar Pradesh and the remaining 5% followed by 3.5% by Allahabad airport, 1.3% by Gorakhpur airport, 0.3% by Agra airport and 0.1% by Kanpur airport in 2016-17. Scheduled air transport operations at Agra, Kanpur and Gorakhpur airports were started in 2013. The following graphs reflect the air transport growth in U.P. in passenger and cargo traffic. Air Passenger Traffic at airports in U.P. 4500 1800% 4000 1600% 3500 1400% 3000 1200% 2500 1000% 2000 800% 1500 600% 1000 400% 500 200% 0 0% Lucknow Allahabad Gorkhpur Agra Kanpur FY15 FY16 FY17 Air Passenger ROG, FY17 (%) RHS Source: AAI DRAFT Air CargoTraffic at airport in U.P. (MT) 4957 4860 4843 FY15 FY16 FY17 Lucknow Source: AAI 4 DRAFT Draft State Civil Aviation Promotion Policy of Uttar Pradesh 2017 International Air Traffic in Uttar Pradesh 800 100% 662 593 600 475 50% 400 0% 200 2.5 2.7 1.5 0 -50% FY17 FY16 FY15 International Air Passenger Traffic, Lucknow ('000s) International Air Cargo Traffic, Lucknow ('000 MT) International Air Passenger ROG (%) RHS International Air Cargo ROG (%) RHS Source: AAI There are 18 divisional headquarters and 75 districts in U.P. The existing status of airports/air connectivity to 18 Divisional headquarters in Uttar Pradesh is as follows: Airports at Lucknow, Varanasi, Gorakhpur are fully functional airports Airports at Agra, Allahabad, Kanpur are operational defence airports, wherein civil enclave is under construction Bareilly has an air force station where civil enclave is being developed by AAI Through an MOU with AAI, airstrips at Meerut, Moradabad, and Faizabad have been handed over to AAI for upgradation. Jhansi, Chitrakoot, Azamgarh, Aligarh are having state owned airstrips at Divisional level which can be developed as No-Frills Airports Divisions of SonebhadraDRAFT (Mirzapur) and Shravasti (Gonda/Devipatan) have airstrips at a place other than Divisional headquarters, which need to be upgraded to No-Frills Airports Saharanpur division has a defence airport, which can be developed as No- Frills Airports Basti division–does not have any airport related facility. 4. Development of airport and related infrastructure State government is committed to improve civil aviation related infrastructure and air connectivity in Uttar Pradesh. There is scope for development of Greenfield /Brownfield airports in U.P. Site clearance has already been received from Government of India to develop a Greenfield international airport at Jewar in District Gautam Budh Nagar. State government will procure/acquire land for core aviation activities and city side development to develop the airport in Jewar on PPP mode in a phased manner. 5 DRAFT Draft State Civil Aviation Promotion Policy of Uttar Pradesh 2017 For the development of brownfield airports (to upgrade existing airports), the cost of land procurement/acquisition will be borne by Airport Authority of India or state government or by both on sharing basis on mutually agreed terms and conditions. 4.1 Incentives under IIEPP 2017: Under Industrial Investment and Employment Promotion Policy of Uttar Pradesh 2017 (IIEPP 2017) para 3.6.2, it is mentioned “Airways: UP has major national and international airports at Lucknow, Varanasi, Allahabad and Gorakhpur. For further improving the air connectivity in the state, GoUP intends to develop new airports to connect all the regions of the state with the rest of the country. Private sector participation will be encouraged for the same. Along with facility of dry cargo, aircraft maintenance hubs will also be encouraged”. Concessions and incentives on industrial investment under para 5 of IIEPP 2017 will be admissible, as per eligibility - for Investment to develop new or upgrade existing airports/ airstrips/ heliports/ helipads including all infrastructure required to operationalize air transport. 4.2 Upgradation of airstrips into No-Frills Airports/civil airports: Airport Authority of India will be developing the airstrips into no-frills airports with the financial assistance of Government of India, once successful RCS bidding covers that airport. The state government has the option to form an SPV/company on its own or with Airport Authority of India for developing airports, upgrading airstrips to no- frill civil airports and managing these airports. State government may explore the possibilities of developmentDRAFT or upgradation of airports on PPP mode. The No- Frills Airports will be later upgraded basis the need. The cost of upgradation of airstrips to No-Frills airports including the cost of all equipment, furniture etc. will be borne by Government of India at an indicative cost of Rs 50 cr to Rs 100 cr without insisting on financial viability as indicated in para 4.d of National Civil Aviation Policy 2017 4.3 Aircraft manufacturing and procurement: Towards promotion of “Make in India” and “Make in U.P.”, for all aircraft/helicopters manufactured or assembled in U.P. the corresponding S-GST receivable to Govt. of U.P. will be reimbursed for 10 years up-to a maximum of 10 units. In case airlines purchase or lease aircraft/helicopter, which is manufactured or assembled in U.P. and deployed primarily
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