The Hindu : Cabinet to discuss airport restructuring next week

Online edition of India's National Newspaper
Thursday, Jul 03, 2003

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National

Cabinet to discuss airport restructuring next week

By Vinay Kumar

NEW DELHI JULY 2. As part of the BJP-led Government's plan to restructure Delhi and Mumbai airports, the two major hubs for international travel to India will be handed over to private companies on management contract basis.

A detailed proposal, outlining the modalities of the arrangement of the joint venture with the Airport Authority of India (AAI), will come up for discussion before the Union Cabinet when it meets next week.

Highly-placed Government sources said the Union Cabinet must give the nod for the proposal before expression of interest is called for.

Initially, private joint venture companies would be given the management for 30 years and it could be extended by 30 years. In all probability, it would be a concessionaire type of arrangement with the private companies. The Civil Aviation Ministry-led initiative would be independent of the fate of the Airport Authority of India, (Amendment), Bill, 2003, awaiting the Rajya Sabha approval. The Bill seeks to define a private airport.

Sources said the joint venture could be a consortium also with the AAI holding a 10-per cent stake and golden share. In all likelihood, the Government would be able to identify the joint venture partner by February 2004, and the work on restructuring the Delhi and Mumbai airports would begin once the designs are approved.

The Indira Gandhi International Airport at Delhi could become the domestic terminal and the existing domestic terminals could be demolished to make space for new facilities. Even a new runway could be added to the Capital's airport, sources said, adding that there was no such possibility in Mumbai due to lack of space.

For all practical purposes, the deal would be modelled on the basis of the VSNL sale but with ample precautions as it would not be an outright sale. The new companies would not be free to hike landing charges and slap other levies. The Government would continue to be the owner of the airports minus the management. The crucial security and Air Traffic Control operations would continue to vest with the Government agencies. There would also be a regulating authority for the two airports.

Sources said that finer details such as payment to the Government either upfront or annually or a combination of both would be worked out later. The joint venture company would be decided on the basis of highest offer made in the bids.

However, the sources said that the investment needed, said to be in the range of Rs. 2,000 to Rs. 3,000 crores, was in the realm of estimates.

Last week, the Minister of State for Civil Aviation, Rajiv Pratap Rudy, indicated that the BJP-led Government would go ahead with the plan, as it believed in setting the entire process in motion. It would take about three to four years for the new airport terminals to come up. Once Delhi and Mumbai airports are completed, the Government could take up other metro airports.

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