The non-metro airport development project appears to have hit another snag.
After inordinate delay in calling bids for the city-side development of these airports, the government is now thinking of calling a joint bid for all of them.
State-owned Airport Authority of India (AAI) is said to have cited difficulties in monitoring different bidders across these many airports and wants a single bidder to do city-side development at all 24 of the airports that are to be developed.
For the remaining 11 non-metro airports, it has become clear that city-side development here holds little potential and therefore, no bids need to be called.
But wouldn’t joint bidding for 24 airports raise issues of monopoly?
A senior official from the ministry of civil aviation said “This is merely the thinking at this stage, nothing has been decided as yet. But I am sure there won’t be any issues related to monopoly… the airport operators of Delhi or Mumbai may charge an exorbitant amount for parking, etc and there is nothing the government can do to stop it. So if a single bidder is allowed to develop parking space/malls etc at all these airports, there should really be no case for monopoly.”
The ministry is in the process of appointing a consultant for this process and an RFP (request for proposal) will be prepared thereafter. The official said no approval is required from the Union Cabinet for calling the joint bid.
This proposal for a single bid follows earlier objections by AAI over the use of a public-private partnership (PPP) model for developing and modernising these airports; AAI wanted a greater role in the commercial operation and maintenance of terminal buildings.
It was eyeing functions such as giving out maintenance contracts for escalators, cleaning, etc, inside the terminal.
In a bid to modernise airport infrastructure across the country, the ministry had mooted development of 35 non-metro airports last year.
While AAI was tasked with development of the terminal building and other airport infrastructure, private bidders were to generate additional revenue through development of city-side services such as vehicle parking, hotels/malls etc.
The ministry official said AAI has been unable to tap the vast potential available in city-side development of airports and is now seeking Rs 12,000 crore in the 11th Five-Year Plan for carrying out modernisation of the non-metro airports.
Of this, Rs 5,400 crore is needed for development of Kolkata and Chennai airports alone (which are also being developed under PPP). The government is expected to issue tax-free bonds worth Rs 5,400 crore and the remaining should come from revenue generation across airports which are under AAI’s control.
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