Article Posted on : - Feb 24, 2009

Indira Gandhi International Airport, New Delhi. File image

NEW DELHI (PTI): National Aviation Company of India Ltd would set up joint venture firms with Singapore Air Terminal Services (SATS) to provide ground-handling services at major airports including Hyderabad and Bangalore, with the Union Cabinet approving the proposal tonight.

NACIL, which runs Air India, and SATS would now form the JV on a 50:50 basis for all these airports, Home Minister P Chidambaram told reporters here, adding that all profits and losses of the business would be shared by NACIL and SATS in the ratio of the equity structure.

In Bangalore, separate JVs would be formed to provide world-class cargo-handling facilities and carry out ground- handling services at an estimated investment of Rs 172 crore.

The project cost of the cargo-handling facility at the Bangalore International Airport Ltd is estimated to be about Rs 99 crore, of which both NACIL and SATS will contribute Rs 30 crore each to create the share capital. The balance will be borrowed from bank and financial institution.

Another JV will be created to provide ground-handling services at Bangalore airport, with an estimated investment of almost Rs 73 crore including a share capital of Rs 50 crore.

In Hyderabad, a similar JV between the two companies will be created to provide ground-handling services. The JV firm would be investing about Rs 80 crore, of which Rs 60 crore will be the share capital.

The investment for similar projects at other metro airports would be decided in due course, he said.