The Airports Authority of India may have to shelve the ambitious plan to privatise four airports, for which bids had been called last year. The process to give out airports at Chennai, Kolkata, Jaipur and Ahmedabad to private parties for operation, management and development has been witnessing hiccups for months already as several deadlines have been breached.
The government's plans to privatise four airports have been halted. Senior civil aviation ministry officials have confirmed to CNBC-TV18 that the bidding process for the airports has been put on hold. Several airport developers had shown interest in bagging the contract to manage Kolkata and Chennai airports. These included Siemens Project Ventures, GVK Airport Holdings, GMR Airport Holdings, Celebi Aviation, Tata Realty and Infrastructure, among others.
Sources say unlike other airports under AAI where private parties have been allowed, significant investment to the tune of Rs 5,000 crore has already been made by AAI, bringing into question the need for privatisation. Besides, there were some employee issues as well.
A final decision on whether to scrap the privatisation process entirely will be taken by the end of this month since August 31 is the deadline for bidders to submit RFQs.
Not just privatisation of these four airports, the NDA government may also put the corporatisation and eventual listing of AAI itself on hold. Ministry sources say, there is growing chorus on the matter, so that AAI remains a state-owned entity so that it can "perform its sovereign functions well". It is learnt that AAI's corporatisation plan will not figure in the upcoming civil aviation policy and that there has been a rethink on this entire listing process.
So why is the government having such frequent rethinks on airport modernisation? One of the most obvious reasons is severe criticism by AAI employees who have questioned the very rationale for giving out airports on PPP model after the state invested large sums of money. They have also been seeking status quo on their service conditions.
Earlier attempts by the authority to get private developers to run showcase airports have not been all successful as there was widespread criticism of Delhi and Mumbai airport privatisation leading to very high user tariffs. This may have also forced the government's hand.
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