Regional connectivity scheme: Government receives bids for 240 routes

The scheme aims to link unconnected towns with financial support from state and central governments

The civil aviation ministry has received bids from 11 companies for around 240 routes under the regional connectivity scheme.

The last date for bid submission was on Monday. According to the initial information, the ministry has received 49 proposals to link 46 unserved airports and 12 underserved airports. "The number of routes for which bids have been received is 283 out of which 240 routes have been identified as regional connectivity scheme routes. The assessment of bids is still on," a source said.

The government has turned down a suggestion from Federation of Indian Chambers of Commerce and Industry to postpone the bidding process by 30 days after the budget. The list of routes for which bids have been received will be declared on Wednesday.

This will be followed by a round of counter bidding and the technical bids will be opened on February 3. The route will be awarded to a bidder who quotes the lowest viability gap funding from the government.

The scheme which was a part of the civil aviation policy that aims to link unconnected towns with financial support (viability gap funding) from state and central governments. Fares on the regional routes less than an hour will be capped at Rs 2,500.

In a joint report, FICCI and KPMG had proposed delaying of the bids till after the budget.

"The policy and regulatory reforms will have a significant impact on the viability analysis for RCS operators. The union budget on February 1 is expected to have important announcements on GST, corporate tax and other important issues. The civil aviation ministry should consider delaying the bids by at least 30 days after the union budget," FICCI and KPMG said in their report.

FICCI has also proposed enhancing the viability gap funding support to airlines from proposed three to five years, allowing outsourcing of crew, reserved slots at constrained airports such as Mumbai or Chennai amongst others.

Another demand is operators should not be forced to fly empty aircraft in order to offer the stipulated number of flights each week.

"Any shortfall or excess should be allowed to be carried forward to the next quarter. A reconciliation should be done every six months to ensure that the operator has operated minimum number of seats under obligation," the report said.