 "Govt considers management contracts, JV route for AAI airports")
Civil aviation ministry is exploring management contract or a joint venture partnership route to manage Chennai, Kolkata and four other Airport Authority of India-run airports.
"There are problems related to maintenance and services at Chennai and Kolkata airports. We need professional management for airports which will handle marketing and concessionaires. We will appoint consultant and study models,'' said civil aviation minister Ajit Singh. He indicated that the government will look at both management contract model or a joint venture partnership between the AAI and private companies.
In case of management contract the selected firm will maintain and operate airport, handle the concessionaires and share revenue with the AAI and in case of joint ventures the airport asset could be transferred to the JV company. "No AAI employee will lose job,'' the minister asserted but AAI unions have been objection to the proposal and had threatened to go on mass leave earlier this moth.
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Kolkata and Chennai airports were refurbished at the cost of Rs 2,325 crore and Rs 2,015 crore, respectively but there have been complaints related to poor quality of work at both the airports. The other airports selected for the public-private partnership model include Lucknow, Guwahati, Jaipur and Ahmedabad. Late last month Prime Minister Manmohan Singh chaired a meeting of top government bureaucrats to fast track infrastructure projects including the PPP development of the AAI airports.
Singh said he had been receiving several complaints from MPs and leaders of Trinamool Congress who favoured private participation in the management of Kolkata airport. " Even the Planning Commission has recommend the public private partnership model for airport operations,'' he said.
The PPP project is being handled by the key infrastructure development cell in the AAI and reports directly to the civil aviation ministry.
"Operation of large AAI airports though the PPP model, in principle, is a great idea. PPP at metro airports has got us world class national assets –Delhi, Mumbai, Hyderabad and Bengaluru are consistently ranked among the top airports by global agencies. PPP has also helped maximize non-aeronautical revenues at airports, which ultimately brings down aeronautical tariffs for the passengers. Indeed, in the short run, the user charges in PPP airports are high but that is more due to regulatory complications than due to the concept of PPP. AAI has been the biggest gainer – it has and will receive significantly large funds from PPP airports as revenue share. These funds can be utilized by AAI to provide air connectivity to far flung corners of the country where private investment may not be forthcoming due to long gestation periods”, says Amber Dubey, Partner and Head-Aerospace and Defense at global consultancy KPMG.