Ports of no recall

When they announced a stir proposed to be begun on Tuesday night, Airports Authority of India employees knew they were on a weak wicket. The courts have already taken a dim view of their earlier attempts to blackmail the government by striking work and upsetting air travel. So, they resorted to rather crude sophistry, calling their agitation ‘non-cooperation’. The AAI union is demanding that plans to shut down the old Bangalore and Hyderabad airports for commercial operations — now that the new airports are ready to begin functioning — be deferred for three months. As the union knows, the closing of the old airports, operated by the AAI, is part of the concession agreement signed with the developers of the new airports. What, however, appears to have emboldened the union is a recommendation of the parliamentary standing committee on transport, tourism and culture. It suggested last week that the government keep the existing airports open and renegotiate the agreement with the developers.

By Tuesday evening, the Central government had imposed the Essential Services Maintenance Act. If that appears to be an extreme step, see how the government has pushed itself into the corner. It has itself encouraged this disregard for contractual commitment. Two months ago, purely for political expedience, the Centre went along with the Goa government’s cancellation of 15 Special Economic Zones in the state. These included 12 SEZs that had already been notified. Foreign investors already seek the protection of bilateral investment treaties, recalling the experience of the project sponsors of the Dabhol power project, when the Maharashtra and Central governments went back on it in 2001. If the Centre were to countenance demands on the airports, it would find its stated policy of encouraging public-private partnerships in infrastructure in immediate jeopardy.

Disregard for the sanctity of contracts is a mystifying aspect of our democracy. We are fond of showing off India as a unique destination for investment by citing our matrix of institutions given to protection of legal rights and the rule of law. But there is a curious belief shared across the political spectrum that governments, as representations of the will of the people, have the mandate to refuse to honour previous governments’, or even their own, contractual obligations. So, there was the instance in Goa, when the UPA went back on SEZs it had itself notified. And here it is, kept from making foreign policy in the national interest by the opposition’s announcement that it would renegotiate the civil nuclear agreement if it came to power. Were the government to give in to the AAI employees, it would do more than just harm the airport modernisation agenda.