Bhogapuram International Airport Company Ltd., (BIACL) was formed as SPV under Companies Act 2013, by Government of Andhra Pradesh as per the orders issued in the G.O.Rt.No.63, I&I (Airports) Department, dated:20-05-2015. BIACL shall be 100% owned by Government of Andhra Pradesh for speedy implementation of Bhogapuram Aerotropolis Project comprising International Airport, Maintenance, Repair and Overhaul (MRO) facility and an Aviation Academy.BIACL will be a project proponent for developing the four Greenfield Airports at Bhogapuram (Vizianagaram District), near Visakhapatnam, Kuppam (Chittoor District), Oravakallu (Kurnool District), Dagadarthi (Nellore District).

Civil Aviation Policy


CLOSE I. Role of the State Government
  1. The State government shall pursue development of all identified projects (Greenfield /brown field) preferably through PPP mode depending on financial viability of projects.
  2. The government will encourage private participation in airport development, regional/ national airline operations and other aviation infrastructure through the following initiatives:
    • Facilitate expeditious procurement and lease of land to project developers interested in developing aviation infrastructure
    • Provide support with regard to relocation of utility lines, removal of encroachments and provision of basic utilities
    • Facilitate procurement of all relevant approvals and permits for development of airport infrastructure
    • Promote single desk clearances, as per the provisions contained in the Industrial Policy The state government will also act as a facilitator to promote cross- department collaboration with tourism, industry, revenue and other departments.
    • Facilitate security services at airports through state police department with license from Bureau of Civil Aviation Security (BCAS)
    • Set up a dedicated fund for financing the development and operations of airport infrastructure projects under PPP(mode of operations of APRADF is explained in subsequent sections)
    • Provide fiscal incentives to aviation industry including airlines for facilitating airport infrastructure development and regular air services between major airports within the State
    • Facilitate the gaps in financing, if any, through Viability Gap Funding (VGF) Scheme from central government, which provides for a capital grant of up to 20% of the project cost. The state could supplement the scheme further up to an extent of 20% of project cost, as may be necessary, on a case-to-case basis
    • Promote development of airport cities (aerotropolis) around major airports based on viability studies
    • Ensure integration of each airport’s master plan with state’s development plan, so as to facilitate the development of necessary infrastructure connectivity with the airport as well as inclusive development of the area. Provide connectivity of site of civil aviation infrastructure with nearest state highway or national highway, logistics parks, cold storage units and other modes of transport. The state government, in collaboration with urban local bodies, shall also provide water supply, power and other related infrastructure for the airport.
    • Facilitate developing major airports as hubs of economic activity in order to drive and derive synergies from the growth of manufacturing, tourism, trade, and other commercial activities in its vicinity. Commercial and infrastructure facilities such as offices, hotels, convention centers, medical facilities, trade centers, logistics facilities, business parks, manufacturing facilities and skill development centers will be encouraged to develop the airport and its immediate zone as an economic hub. Towards this, areas around select airports will be delineated as exclusive zones to be developed as airport cities.
    • Promote setting up of MRO facilities, aviation training facilities, aircraft and component manufacturing, hospitality infrastructure and tourism services at select airports, based on the market potential

II.Role of Department of Energy, Infrastructure and Investment

  1. The Department of Energy, Infrastructure and Investment (Energy, I&I) is the apex department responsible for planning, implementation, execution and monitoring of civil aviation infrastructure projects.
  2. The Energy, I&I department shall have the overall responsibility for coordinating and facilitating development of all identified civil aviation projects including providing support to developers and operators.
  3. The Energy, I&I department shall undertake/enable the activities related to the development of aviation sector through its corporations – Andhra Pradesh Aviation Corporation Ltd (APACL) and Infrastructure Corporation of Andhra Pradesh Ltd (INCAP). INCAP will be the project nodal agency for the development of new airports under Greenfield airports policy in the State.
  4. The Energy, I&I department will identify the potential locations for airports and other civil aviation infrastructure, based on the state’s long-term economic development plans.

The other inputs to be considered for identifying the locations may be AP Industrial Investments Promotion Policy, AP Tourism Policy, Vishakhapatnam – Chennai Industrial Corridor, population in catchment area, Gross District Domestic Product(GDDP), studies done in the past, MoUs signed with global investors, existing pattern of passengers travelling by air and distance from an existing or proposed airport etc.

III.Role of Department of Industries and Commerce

  1. The Department of Industry and Commerce will be responsible for promoting aerospace manufacturing and allied industries by setting up A&D manufacturing units at suitable locations, through provision of support system and fiscal incentives.
  2. The Department shall facilitate requisite clearances from State government departments/ agencies for setting up aviation infrastructure units/industries under single desk means as per the Industrial Policy.

IV. Role of Department of Tourism

  1. The Department of Tourism will be responsible for promoting tourism infrastructure facilities around identified airports.
  2. It will also facilitate connectivity from such airports to identified locations of tourism interest within the State.

V.Project specific Special Purpose Vehicles (SPVs)

  1. In order to expedite project related approvals and obtain land for key airport projects, it is proposed to create project specific SPVs for speedy and smooth development of airports and other aviation infrastructure projects.
  2. The government will float the SPVs for identified aviation projects as the sponsor. The SPV will act as the nodal agency for planning and implementation of specified airport infrastructure projects and provide support to project developers and operators, as per the Policy guidelines outlined herein.
  3. This SPV will be focused on securing necessary clearances and approvals, including obtaining land for the aviation project purposes and handling the bid process. Once the preparatory phase is complete, SPV may be handed over to successful bidder/consortium for project implementation. Government may retain the minority stake through equity equivalent of land cost or other means etc., as deemed fit at that stage.
  4. The functions to be performed by the project specific SPVs include -
    • Undertake preparation of Feasibility Report, Detailed Project Report, and Environment Impact Assessment Report etc., to assess the feasibility and financial viability of the Project.
    • Assist in acquisition of all government approvals required to start an airport, such as site clearances, environmental clearances, Ministry of Defence (MoD) approval and Ministry of Civil Aviation (MoCA) approval etc.
    • Assist in obtaining land required for the project, in coordination with the District administration.
    • Initiate discussions with and enable equity participation from potential investors in the SPVs
    • Facilitate competitive and transparent bidding through preparation of bid documents, bids evaluation and award of the project a.Determine the bidding parameter for the project, based on market conditions, viability, response from prospective developers and specific project characteristics
    • SPV to transfer approvals to the developer who would only need to setup and operate the asset
    • The SPV will act as the mechanism for expeditious commissioning of the identified airport infrastructure projects and provide support to project developers and operators

VI. Role of the Private Sector

  1. GoAP encourages the private sector to play a pivotal role in the growth of aviation infrastructure in the State. GoAP seeks and promotes private participation in the development of new airports, supporting facilities and allied industries.
  2. Selection of private developers or operators will be done through a competitive bidding process as per extant provisions.
  3. For projects undertaken on PPP basis, VGF will be provided to support project viability, after due evaluation on need basis. If the VGF is not adequate to make projects commercially viable, provision of additional financial incentives or capital support will also be considered by the government on a case-to-case basis.

VII. Andhra Pradesh Regional Airport Development Fund

  1. Airport development in tier 2/3 cities require innovative funding solutions. The government will set up the Andhra Pradesh Regional Airport Development Fund (APRADF) to provide financial support for regional airport development.
  2. The initial corpus of this revolving fund will be RS. 100 crores and will be provided as budgetary support.
  3. The APRADF will be utilized to provide financial support for development and operation of airports and/or to underwrite seats for commercial airline operations wherever deemed necessary.