The ministry of civil aviation will hold a secretary-level meeting with the ministry of finance this week to chalk out the details of the corporatisation of the Mumbai and Delhi airports.

According to official sources, the meeting will work out the funding pattern for the reconstruction and upgradation of the two airports.

"The ministry has sought a capital grant from the finance ministry for the project, but we are yet to receive a response," an official said.

The civil aviation ministry has decided to set up two companies under the Airports Authority of India for the Mumbai and Delhi airports.

This was announced by Finance Minister Jaswant Singh in the Budget for 2003-04. The corporatisation of the airports does not necessitate an amendment to the AAI Act.

Officials said the meeting would also decide whether joint ventures for the airports would be formed before beginning the construction and upgradation of the airports. The meeting is also likely to work out the shareholding pattern for the airports.

The cost of upgradation and reconstruction of the terminals has been estimated at about Rs 3,500 crore (Rs 35 billion). The initial investments are likely to come from the Rs 1,000 crore (Rs 10 billion) reserves of the AAI.

To speed up the corporatisation of the two airports, advertisements have been issued by the authority for the appointment of international consultants.

However, according to AAI officials, no decision could be taken without clear directives from the ministry.

The airport privatisation issue has been hanging fire since 1998 with the government not being able to decide on the selloff format.

The ministry had proposed the privatisation of the airports with the AAI holding a 5 per cent stake.

However, the Cabinet had turned down the offer and asked it to rework the proposal in consultation with the finance ministry.