http://www.deccan.com/brunch/default.shtml#Step%20towards%20world-class%20airports
Step towards world-class airports The NDA government has set the ball rolling for the third time for the modernisation of Delhi and Mumbai airports. The Union Cabinet at a meeting chaired by Prime Minister Atal Behari Vajpayee on September 11 gave a clearance to the project to build world-class airports at Mumbai and Delhi with a view to making these two airports major international aviation hubs An empowered committee of ministers, comprising Jaswant Singh, Rajiv Pratap Rudy, Arun Shourie and Arun Jaitley, was also appointed to work out the nitty-gritty of the project. As per the latest Cabinet decision, the two new airports will be built by joint venture companies in which the private/foreign players will be allowed to pick up upto 74 per cent equity leaving the remaining 26 per cent for the Airports Authority of India, which has been the sole owner and operator of airports in the country so far. The new airports will be developed by two separate consortia of designers, builders and operators of existing world class airports. The Union Cabinet had on two earlier occasions tried to take up the modernisation of the Delhi and Mumbai airports. First, in 1999, the Cabinet cleared corporatisation of the two airports. It did not work out. Then in the year 2000, the Cabinet decided to lease out the two airports to private parties. This move too failed to take off in spite of large sums of money spent by the government in organising road-shows abroad to attract private/foreign players to take the Delhi and Mumbai airports in lease from the government. The leasing move failed as the government had embarked in the move without properly going through the legal provisions in the Airport Authority of India Act. After the ministry of civil aviation had organised the road-shows and created the hype over the leasing project, it was brought to its notice that the law does not allow it to lease out the airports. And is the government wanted to lease out the airports, it will have to first amend the AAI Act. The AAI Act has now been amended, and unlike in the past the government seems to be treading more cautiously. The latest move of the government has generated more hope in the official circles than the last two. But the timeframe given by the Union Minister of State for Civil Aviation Rajiv Pratap Rudy for the completion of the project is unlikely to be met. According to Rudy, the new airports at Delhi and Mumbai will be ready in the next two years. There are many important issues that will have to be resolved before even the process of selecting the 74 per cent partner to build the new airports could be started. One of the key issues is related to security of airports once they pass into the private hands. The Cabinet committee on security had recently taken a decision not to allow private and foreign airlines to handle their ground operations at Indian airports. The CCS said that only the government-owned Air-India, Indian Airlines and the Airport Authority of India will handle the ground operations of all the airlines using the Indian airports. These ground operations include passenger check-ins, baggage check-ins, cargo loading and unloading, step-ladder handling, ramp handling, aircraft cleaning, etc. The CCS decision now runs counter to the Cabinet decision to hand over the entire airport to private or foreign players. The government plans to keep only the air traffic control and security with the Airport Authority of India, all the other operations will be handed over to the private partner. Obviously, if the private and foreign players can not be trusted with ground handling operations, they should not be handed over the entire airport. This will probably be the first issue that the empowered committee of ministers appointed by the Cabinet will have to resolve. The CCS decision not to allow private or foreign airlines to handle ground operations has created another problem. As per indications from the ministry of civil aviation the new owners will get the 5000 acres of land at Delhi airport and 1300 acres land at Mumbai to build the new terminal buildings. The existing international terminals in the two cities will be turned into domestic terminals. The domestic and international terminals will be connected with mono-rails. The new owners will also be allowed to use the land for any other revenue generating activities, such as building golf course, shopping malls, hotels, motels, etc. Officials in the ministry of civil aviation are keeping their fingers crossed to see what revenue-sharing model the empowered committee of ministers frames after transferring such huge profit-making airports and pieces of prime land to the private/foreign players. Already, the government is has been in serious financial wrangling for the last couple of years with the private players who have been awarded the work of developing the two airports at Hyderabad and Bangalore. The private parties are demanding huge subsidies that the government is not willing to grant. The government had signed a memorandum of understanding in 1999 with a consortium comprising Siemens, Zurich Airport and Larsen and Tubro to develop a new airport at Devanahalli near Bangalore. The consortium was goven 74 per cent stake while the government of Karnataka kept 13 per cent and 13 per cent stake was given to AAI. Similarly, for a private sector airport at Shamsabad near Hyderabad, Malaysian Airport and an Indian company GMR Vasavi were awarded contract. Another key issue that the ministerial committee will have to settle before starting the privatisation process is the fate of government employees. There are about 8,000 employees of the Airport Authority of India working at Delhi and Mumbai airports. The committee will have to take a decision as to what will happen to these employees once the management passes into private hands. It is learnt that KPMG, which was appointed as a consultant, has been asked to prepare for inviting fresh expression of interest from companies or consortia to design and construct the new airport terminals. Eighteen top architectural and construction companies, including those that have designed and developed airports at Singapore, Kuala Lumpur, Hong Kong, Paris and Zurich have evinced interested in developing Delhi and Mumbai airports. ########################################################################## # Send submissions for Goanet to [EMAIL PROTECTED] # # PLEASE remember to stay on-topic (related to Goa), and avoid top-posts # # More details on Goanet at http://joingoanet.shorturl.com/ # # Please keep your discussion/tone polite, to reflect respect to others # ##########################################################################
