House panel rejects airport plan

Committee says investment on modernisation will be a waste.

A parliamentary panel has recommended cancellation of the government's ambitious plan to modernise the airports in Delhi and Mumbai and said that greenfield airports should be constructed in both the cities.

In its 90th report tabled yesterday in Parliament, the standing committee on transport, tourism and culture headed by CPI(M) MP Nilotpal Basu pointed out that investing huge money on modernisation would be a waste, as it was not possible to improve the capacity of the present Mumbai airport.

It was also pointed out by the committee that the initial investment estimate of the government for the modernisation of the airports to the tune of Rs 10,000 crore to Rs 20, 000 crore was too inflated, and gave the impression that the funds were required immediately, while it was actually required only in phased manner.

As per the current modernisation model, the government would lease the Delhi and Mumbai airports to a consortium, holding 74 per cent stake. The consortium would then develop the two airports.

The panel observed that the Mumbai airport would be completely choked by 2012 and the construction of a second runway there was an impossibility.

"The committee was of the opinion that the option of going in for a new greenfield airport rather than proposed modernisation of Mumbai airport would be more prudent," the report said.

The report was also of the view that the greenfield airport in Mumbai with much more capacity would require much less investment.

In the case of the Delhi airport, the standing committee was of the view that the Delhi airport, with its inherent lacuna, was inadequate to handle the projected traffic growth.

The committee felt that the government could even mobilise the funds required. "This would ensure not only the management control of the proposed operators of the airport in the hands of Indian nationals, but would also result in protecting the safety, security and sovereignty of the country," the committee stated.

The standing committee had also sought a probe into the awarding of contracts at the Bangalore International Airport Limited (BIAL), observing that since the equity holders were themselves the service providers, there was certainly a conflict of interest at BIAL.

The panel had also recommended that the existing airport at Hyderabad should not be closed down, as decided by the government, once the new airport comes up in the city.

The panel said vigilance should be exercised over the new airlines coming up in the country and their methods of seeking permission for procurement of aircraft and allotment of parking bays at airports is quite essential.

DEAD END

September 11, 2003 Cabinet approved the modernisation of Delhi and Mumbai airports.

January 2004 ABN Amro was selected as the consultant for the project.

February 17, 2004 Expression of interest invited from companies.

July 20, 2004 Nine companies submit EoIs to participate in the project.

June 15, 2005 A GoM was reconstituted to oversee the project.

June 22, 2005 Government decides to redraft the transaction documents and start the bid process afresh.

August 23, 2005 Parliamentary Standing committee recommends to scrap the present model of airport modernisation.