Millennium Post

Airports privatisation: House panel opposes Centre’s move

As government proceeds with the process to privatise six AAI airports, a parliamentary panel is understood to have opposed it and recommended that the public sector airports body should itself award management contracts to entities having expertise in the field.

The panel is also believed to have suggested that instead of privatising them, their management can be retained by the Airports Authority of India (AAI), which could set up a special purpose vehicle (SPV) to acquire the necessary expertise in operating these airports.

The Standing Committee on Transport, Tourism and Culture, which recently adopted a unanimous report to be submitted to Parliament shortly, is understood to have felt that privatisation of management and operation of the six airports would result in profit-maximisation by private entities, leading to increased costs for passengers and airlines.

It is learnt to have said the Planning Commission could not provide convincing replies as to why, six years later, it overturned its earlier position of 2006 not to privatise any airport after Delhi and Mumbai. The committee also felt that the Planning Commission could not justify its stand that the AAI had inherent constraints to manage and operate these airports.

It is understood to have said that the AAI, which has been so far developing and running all airports in India, should be allowed to manage and operate these airports for two years to examine whether it was capable of doing so. The issue of giving management contracts should be decided only after examining the experiences over two years. Besides Kolkata and Chennai, the other airports modernised recently by the AAI and put on the block are at Lucknow, Jaipur, Ahmedabad and Guwahati. Expressions of interest are now being sought from private bidders.

The committee chairman, Sitaram Yechury, had recently said in Kolkata that 'we have adopted a report on privatisation of airports. I cannot disclose all the details till it is submitted before the chairman of Rajya Sabha possibly in a week's time'.

He had also said, 'I can tell you that we are totally against privatisation, allowing transfer of assets to private entities,' adding 'instead, AAI should be allowed to offer long-term management contracts.'
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