The Hindu : National : Government attacked on privatisation of airports

Online edition of India's National Newspaper
Friday, Dec 16, 2005

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National

Government attacked on privatisation of airports

Special Correspondent

NEW DELHI : Mounting a scathing attack against the Government's move to restructure and privatise Delhi and Mumbai airports, the Communist Party of India (Marxist) on Thursday raised questions on the "transparency'' of the process, dubbed it as "dubious'' and cautioned that a scam was in the making.

Responding to the calling attention motion in Lok Sabha, the Civil Aviation Minister, Praful Patel, said the process of restructuring and modernisation of these two airports was "based on transparent procedure'' and asserted there was no question of "selling these airports or transfer of assets.'' He said what was envisaged was a joint venture without entrusting any sovereign functions such as security, air traffic control, communication, navigation and surveillance services, customs and immigration and the like.

Dissatisfied with the Minister's response, the CPI(M) and Samajwadi Party MPs staged a walkout. Expressing unhappiness over Mr. Patel's assurance on transparency, the Bharatiya Janata Party said it was walking out, just as the House stood adjourned. The CPI(M) member, Mohammed Salim, who raised the issue on the Government's decision to engage private companies to modernise and operate these two airports said there was "a conflict of interest'' between general technical consultants, the financial advisers and legal advisers who were associated with bidders.

CPI(M) member's poser

Stating that the party was not opposed to modernisation and favoured Greenfield route, Mr. Salim wanted to know whether the Government would take into account report of the Airport Authority of India (AAI) on the issue. He said there were also reports suggesting that financial advisors ABN Amro had bidding companies Reliance and GMR, as did the legal advisers, Amirchand Mangaldas. He said the global technical consultant was taken over by another group.

Besides, Mr. Salim, Basudeb Acharia and Sunil Khan, (both CPI-M), Ajoy Chakraborty (CPI), and Sumitra Mahajan and V.K. Malhotra (BJP) also sought to know the financial viability of AAI once control of these two airports that generate 60 per cent of revenue turns private.

On his part, Mr. Patel said AAI employees' alternate plan for development of these airports was examined by AAI and the consultants and the empowered Group of Ministers (eGoM) would consider the recommendations of the AAI.

The current modernisation and restructuring plan envisages upfront payment of Rs. 150 crores for each airport, a minimum of 5 per cent of gross revenue on year-to-year basis to AAI and that after the transaction the overhead cost of the Authority was expected to come down significantly.

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