So in case the government was to rethink on closing the old airports in these two cities, it may just have to deal with the compensation conundrum once again.
NEW DELHI: Is the government bound to pay compensation to the consortium which is modernising the Delhi airport in case another international airport is also allowed to come up at Greater Noida?
It seems that when, after giving it an in-principle approval, the government referred the Greater Noida project to a new Group of Ministers (GoM) earlier this year, the issue of compensation was one of the major stumbling blocks.
The government’s contention? The GMR-led consortium which is developing Delhi airport has the ‘right of first refusal’ when bidding for the new airport begins but it is not entitled to any compensation because of revenue loss thereof. RoFR ensures that GMR gets preference in bidding for the Greater Noida airport in case its bid is within 10% of the highest bidder.
Official sources said that the GoM is considering all the pros and cons of the compensation rigmarole before coming to any final decision and this is one of the reasons why the decision has not come so far.
The GoM comprises finance minister P Chidambaram, law minister H R Bharadwaj, science & technology minister Kapil Sibal besides civil aviation minister Praful Patel. It has held only one meeting so far, after which Bharadwaj’s ministry has been asked to give its inputs.
The issue of compensation arises because the proposed airport at Greater Noida violates the current policy that prohibits a second airport coming up within 150 km of an existing one; the Delhi International Airport (DIAL) is just about 70 km away.
Sources said that the GMR group has contended that the RoFR becomes relevant only if the existing airport (DIAL) is unable to meet projected traffic demand and development of a second airport becomes necessary.
“But since DIAL is well-prepared to meet traffic demand till 2026, according to the Operation Management Development Agreement (OMDA) signed between the consortium and the government, GMR has pointed out there is really no need for a second airport. If the second airport is allowed despite this, GMR would lose level-playing field and therefore should be adequately compensated.”
The source said that though GMR has not quantified the compensation it wants, the issue is contentious enough for the GoM to take its time over a decision. Despite repeated attempts, GMR officials remained unavailable.
A decision on whether GMR qualifies for compensation would have wide ramifications since the same clause may also apply to the developers of new airports at Hyderabad and Bangalore. At both these places, the concession agreement between the government and developers carries a clause that no second airport would be allowed to function for the next 25 years!
So in case the government was to rethink on closing the old airports in these two cities, it may just have to deal with the compensation conundrum once again.
b_sindhu@dnaindia.net
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