Bids invited for upgrading Chennai, Kolkata airports

Less than three years back, the Airports Authority of India (AAI) spent 2,015 crore and 2,324 crore on upgrading Chennai and Kolkata airport respectively. Now, yet again, the Ministry of Civil Aviation (MCA) has initiated the process of calling private contractors for upgrading the two airports. This despite the fact that Committee of Infrastructure, headed by the prime minister, in 2006 decided that the two airports will not be privatised. The Planning Commission and the Parliamentary Standing Committee in their reports had raised objections on the privatisation plan of the ministry.

Of the total 111 airports with AAI, only four of them are listed as profit making: Chennai, Kolkata, Goa and Calicut airports. Chennai and Kolkata were expanded and upgraded by AAI three years back. The AAI had then increased the runway length and developed the car parking area. At Chennai airport, a cargo terminal with new modern import cargo complex was also developed. At Kolkata airport, the AAI had upgraded the terminal building and strengthened the runway and developed aircraft parking spaces.

Three years down the line, the MCA has yet again called for a fresh bid for upgrading the airport and other city side infrastructure. This time the ministry wants to give these airports to private operators to re-do the terminal building and develop the city side infrastructure on the lines of Mumbai and Delhi airport.

The bids for the two airports have been called at the time when the Parliamentary Standing Committee in its report submitted in October last year observed, "When Delhi and Mumbai airports were restructured under PPP mode in 2005, it was decided at the level of the Prime Minister Office that Chennai and Kolkata airports will not be privatised." The decision was taken by the Committee of Infrastructure headed by the prime minister. It was also decided that the service on the air side and the terminal building will remain with the AAI. The committee has also raised objections to privatisation of profit-making airports, while the loss making airports will continue to remain with the AAI.

This bid of the MCA also violated the tripartite agreement signed between the AAI, the Employees' Union and the government. "Privatising airports one after the other will make the services expensive. It is ultimately the consumer who has to pay for the high maintenance cost of the airport. Delhi and Mumbai have become costlier after privatisation," said Balraj Singh Ahalawat, president of the Joint Forum of Union and Association of AAI.

Whenever the task of privatising an airport is given to a private contractor, the ministry besides the airport terminal building is also given the contract for developing city side infrastructure including hotels, roads and the landscaping. "But for AAI, the role remains limited to developing the terminal building. But the private operator develops the area along making the airport people friendly," said a senior officer of the MCA.

Despite objections from all quarters, the ministry says that privatising and expansion of these airports was the need of the hour. "What we invested in a few years will cater to the traffic till 2017. The traffic is expected to increase in the years to come and the airports will need further expansion. So the ministry has called for a fresh bid," said a senior MCA officer. The officer also said that the private party will develop and maintain the airports for the next thirty years. "The AAI being a government organisation is not able to increase the business at the airports like the private players. For making the airports world class, the government needs to privatise them," said the officer.