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The government has scrapped the privatisation of four major airports - those at Chennai, Kolkata, Jaipur and Ahmedabad. While the airports at Chennai and Kolkata will continue to remain under the complete control of the Airports Authority of India (AAI), fresh bids for the Jaipur and Ahmedabad airports will be invited from private players. These bids, however, would only be for operation and maintenance contracts, said government officials close to the development.
"We will invite fresh bids to give operation and maintenance contracts for the Jaipur and Ahmedabad airports, which is different from the current tender," said an official on condition of anonymity.
This means only certain activities related to operations of the Jaipur and Ahmedabad airports will be handed to private developers, against an earlier proposal of public-private development of these airports. The public-private partnership (PPP) model had envisaged handing over the operations, management and development of these airports to successful bidders.
"Rather than going through the PPP route, operations and maintenance will be given to specialised operators and a revised RFQ (request for quotation) will have to be issued," said an AAI official.
Union Civil Aviation Secretary R N Choubey didn't respond to a request for comment. A ministry spokesperson said he wasn't aware of the development.
The government's plan might come as a setback to the private sector, as companies such as GMR Airports, GVK Group and Adani Ports and Special Economic Zone had expressed interest in running these airports under the PPP model.
The United Progressive Alliance (UPA) government had initiated the PPP process for modernising six airports - those at Kolkata, Chennai, Jaipur, Guwahati, Ahmedabad and Lucknow. However, after coming to power, the National Democratic Alliance government scrapped the process and invited fresh bids for only four of these airports.
Currently, the airports at Delhi and Mumbai are run by private companies. While the Delhi airport is run by GMR Infrastructure Ltd, the one in Mumbai is managed by GVK Infrastructure.
In January, AAI had invited applications for four airports. The applications were to transfer the management, development and operation of these airports to private firms. The move was, however, criticised by the 2,000-odd staff working at these airports, as they were opposed to the privatisation of airports.
"There are issues related to human resources. The concerns of employees have to be addressed. Tariff is another issue. Prospective bidders have raised concern and those related to employees is one of those. A concerted decision has to be taken," AAI Chairman R K Srivastava had said in March.
The International Air Transport Association (IATA), too, opposed the privatisation of these airports.
"My suggestion is the government should carry out a rigorous cost-benefit analysis before taking a decision on these four Airports Authority-run airports in Chennai, Kolkata Ahmedabad and Jaipur," IATA Director-General Tony Tyler said last month.
AAI has spent Rs 2,700 crore on upgrading the Kolkata airport and Rs 2,400 crore on modernising the airport in Chennai.
The NDA government has also put on hold the UPA government's ambitious plan to develop 50 low-cost airports in non-metro cities, citing feasibility issues. Barring the development of low-cost airports in Karnataka, Rajasthan, Arunachal Pradesh and Odisha, other such plans have been put into cold storage.
OFF THE RUNWAY
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July 2012: Inter-ministerial task force set up by Planning Commission recommends development and operation of Chennai & Kolkata airports through PPP model
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July 2013: UPA govt sets up inter-ministerial group to review financial plans for airports. Govt identifies Chennai, Kolkata, Ahmedabad, Jaipur, Lucknow and Guwahati airports for PPP projects
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Nov 2013: A parliamentary standing committee opposes PPP model for AAI airports. AAI labour unions, too, oppose the plan
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Nov 2014: NDA govt cancels applications for the privatisation initiated by the UPA govt
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Dec 2014: NDA govt invites fresh applications from private players for Chennai, Kolkata, Jaipur and Ahmedabad airports; deadline for applying extended several times
