The Union Cabinet on Thursday cleared the privatisation of Delhi and Mumbai airports.

Civil Aviation Minister Rajiv Pratap Rudy said the Cabinet, which met under the chairmanship of Prime Minister Atal Bihari Vajpayee, while approving the proposal had decided that the private investor would be allowed to hold 74 per cent equity in the joint venture.

The Airports Authority of India would hold the rest of the 26 per cent.

Air Traffic control and the security in the privatised airports would remain with the government and the other affairs would be managed by the private partners.

The private partners could be a consortium, and may include foreign players.

The Cabinet specified that the bidders for the airport privatisation plan would have to be operators of world-class airports.

The project would, however, have to be cleared by the ministry of home affairs for security reasons.

The Cabinet also decided to set up an empowered committee comprising Rudy, Finance Minister Jaswant Singh, Divestment Minister Arun Shourie and Law Minister Arun Jaitley to look into the overall parameters of the privatisation and modernisation process.

Rudy said the committee will also look into the financial tariff formula, architectural designs and also lay down the government's conditions for the establishment of modern airports.

The selection process will have to completed within eight months, while four months have been stipulated for the completion of the bidding process.

Haj proposal cleared

Meanwhile, the Cabinet also cleared the Haj proposal, under which the subsidy granted to each pilgrim will remain unchanged at Rs 28,680. The pilgrim will have to shell out Rs 12,000.