Anjuli Bhargava: Shun the shutters

OUT OF THE BLUE

It's March 2008. The chaos and misery of air travellers to and from Bangalore and Hyderabad were to end as the two new swank airports open gates. Yet, in both cities, as the launch date approaches, the clamour of discontent just gets louder. People want the old facilities to stay.

Airport officials have announced a nationwide indefinite strike. Local members of Parliament (MPs) are questioning the closing down of old airports, and residents are complaining the new airports are too far away. They're even willing to put up with shabby services at the old airports, including long, rain-soaked queues to get in. Industry is horrified at the sheer commute time "" representatives from Bangalore's IT sector met the aviation secretary earlier this week to complain. Airlines fear the user development fee and its impact on traffic. The matter has reached the courts, with a public interest litigation filed against closure in Karnataka.

To close, in the public interest, something that has been built in the public interest in the first place, is surely not the smartest option. Innumerable overlooked parliamentary committee reports (I have the August 1995 report with me) have made the same point the last one did "" which has been consistently ignored: revisit closure and plan connectivity. Since traffic growth in both cities is much higher than ever envisaged, there is every basis for revisiting the contract. I see no reason why the government can't renegotiate the contracts and, if necessary, pay whatever compensation is necessary. Dramatic and rapid changes have made whatever plans were made even three years ago seem ill-considered today. Just as in the case of the Noida toll bridge, when things went through a downturn, the government bailed out the private developer; similarly, in the case of an upturn, there's no reason why the private developer cannot be asked to bail out the government.

A second argument for not closing the existing airports is that both state governments have, quite predictably, failed to provide the connectivity needed. The routes are choked and noisy, and that's when no one in particular is headed that way. Imagine the mess when the airports are fully functional. This would entail airport employees, airline employees, support staff and taxis, autos and buses full of passengers heading there on a daily basis, roughly all at the same time. My fear is that even when all connecting roads are built, the drive will remain stressful and congested, thanks to the haphazard buildings sprouting up along the route. So the question really is: who should pay for the state's failure? The passengers or the private developers? My vote is for the developers.

I can understand closing down a defunct public sector factory that produces, say, drugs, but the runway is not in the same category. By closing down the public sector facility, you are creating a private sector monopoly. After you have done that without putting in place an overseeing authority, you are hardly in a position to question who it charges how much for what (I refer here to the user development fee). People must fly, and since the only choice they had is gone, they must pay whatever they are asked to.

I also don't see much merit in the arguments of the private developers. Viability is not under question at all. Closure had been agreed to at a certain time and in a certain context. The time may not have changed that dramatically, but the context certainly has. With traffic growth galloping, both the airports are bound to make money. Instead of breaking even in the fifth year, it may happen in the seventh. Over a long term, it's not that hard a hit to take. I see no reason why their lenders should be upset or have their faith shaken. Contracts, especially those involving the government, are often renegotiated. It's not like India will be setting a precedent for the world.

Although the private sector has regaled me with examples, there are few countries in the world "" both severely short of funds for infrastructure and facing an unprecedented surge in demand "" that would take a step like this. Yes, Hong Kong may have closed its old airport but does it take a two-hour gruelling drive for commuters to reach the new one?

As I see it, no credible solution on the use of the old facilities has yet come forward. You cannot turn them into domestic terminals and make the new airports international. You can't make them low-cost terminals either. Passengers will still need to transit. In any case, full-service airlines will oppose such a move tooth-and-nail since they would stand to lose traffic to low-cost airlines. Rather than travel an hour or two to an airport to catch a Jet or Kingfisher flight, a passenger taking a 45-minute to one-hour flight will settle for a low-fare airline that departs centrally, thus cutting out the travel time.

So far, the government has shown no intention of going back on its contract with the Bangalore International Airport Ltd (BIAL) and Hyderabad International Airport Ltd (HIAL) "" in fact, the closure of the Begumpet airport in Hyderabad had been notified. But if the users of the airports adopt a more unanimous voice, they could galvanise the government into action.