AAI control on non-metro airports to stay

Soon after Left leader Sitaram Yechury wrote to the Prime Minister on the alleged ‘backdoor privatisation’ of 35 non-metro airports...

Soon after Left leader Sitaram Yechury wrote to the Prime Minister on the alleged ‘backdoor privatisation’ of 35 non-metro airports, the Ministry of Civil Aviation was ready with quick corrective measures to allay them.

The ministry will soon be ‘making changes’ in the Request for Quotations documents for Udaipur and Amritsar airports to omit the clause pertaining to ‘commercial management of terminal space’ from it and thereby, address the Left’s concerns. The go-ahead to the amendment means that the ministry’s views have finally prevailed over the Planning Commission’s on the issue. However, the amendment comes rather late, as the bidding process began in October 2007 and the bidders have been already shortlisted by the ministry.

“Minor changes will have to be made in the RFQs for both Amritsar and Udaipur airports. Our stand has always been that a terminal’s commercial management is the domain of Airports Authority of India, and will always remain so. While the Planning Commission has its opinion on the issue — which we felt could interfere with AAI’s functioning — it is the ministry’s view that has finally prevailed. Accordingly, the RFQs will be amended to ensure commercial management of the terminal remains with the AAI,” said a senior official.

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He added that the shortlisted bidders will be intimated about the changes in the RFQ early next month and it would be their choice to stay or opt out of the bidding process.

In the fray for the two airports are biggies like Anil Ambani-promoted Reliance Energy, Tata Changi consortium, Larsen & Toubro, Fraport consortium, Lanco Infratech, GMR, Maytas Infra consortium. Udaipur and Amritsar airports are the first two non-metro airports to be lined up for upgradation by the AAI. The others will soon follow.

At the heart of the issue is the scope of the two RFQ documents that clearly call for ‘commercial operation and maintenance of the terminal building and the development of the city side’ at Udaipur and Amritsar airports. The scope of work, say these two RFQs, may broadly include ‘O&M of the terminal building, including commercial use of the space therein’. While the AAI usually sub-contracts commercial space within the terminal for a period of five years, the RFQs made way for up to 30 years of concession period during which the private partner would be allowed to charge a prefixed user fee from passengers. This will, in effect, dilute the control of the AAI within the terminal, contended the Left. MoCA had assured the Left parties, when the airport privatisation/ upgradation exercise began in 2004, that AAI would retain control of the non-metro airports.

However, these ‘inconsistencies’ crept into the RFQ despite the ministry’s reservations largely due to the view of the Planning Commission.

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The issue saw the Plan Panel and the ministry on opposite sides and Minister for Civil Aviation Praful Patel quickly clarified on it after Yechury’s letter to the PM. “The Government does not subscribe to the IMG’s views. The PM’s Infrastructure Committee has decided that non-metro airports would be managed and maintained by the AAI and city-side development will be done only through joint venture partnerships,” he had said earlier this month. “It is only the allocated commercial space which would be run by private parties. Our view is categorical,” he had clarified.