AAI kicks off plan for developing areas around non-metro airports

Not really cosying up to the idea, AAI unions feel that this would mean a huge escalation in the cost of services inside the terminal and at car parks since private players would be free to decide the pricing of services in these places.

“As per the arrangement, the commercial activity within the terminal area would be controlled by the private player who would, in turn, pay a pre-decided lump sum to AAI as revenue share,” a senior AAI official told The Sunday Express. Similarly, the car parks would also be handed over to private partners selected.

“We have no problems with private players being roped in for commercially developing areas in the airport’s periphery since it may be difficult for AAI to do that itself. However, the commercial control inside the terminal area and the car park should remain with AAI. Even if AAI decides to give exclusive rights to private players inside the terminal building, it should lay down maximum prices beyond which a private party may not charge. Otherwise, the general passenger would be forced to pay exorbitant rates,” said M K Ghoshal, general secretary of the Airports Authority Employees Union (AAEU).

Having defined city-side development as construction of hotels, convention centres, food court, flight kitchens, petrol pumps, hospitals, shopping malls, hyper marts, golf courses and cargo warehouses, the Civil Aviation Ministry had initially said AAI would undertake the airside development of these 35 non-metro airports, including terminal buildings, while the city-side development would be done through Public Private Partnerships (PPP).

This, however, was later changed with the ministry deciding to include “operation and maintenance of terminal buildings” along with commercial spaces and cargo areas in the definition of City Side Development.

AAEU, meanwhile, appears to be adopting a wait-and-watch policy for now. “We have already clarified our stance to the Civil Aviation Minister and the AAI Chairman. But we will push for our concerns if the Government decides to proceed without addressing them,” Ghoshal said.