Mumbai: India’s ambitious project to modernize 35 non-metro airports may miss its deadline, with the ministry of civil aviation deciding to revise its terms and conditions.
The ministry had already pre-qualified some companies, including Tata Power Ltd and Reliance Energy Ltd, for participating in the bidding process for the Amritsar and Udaipur airports. Lanco Infratech Ltd, Maytas Infra Ltd, GMR Infrastructure Ltd and Larsen and Toubro Ltd along with its international partner, were also shortlisted for the programme. The ministry had planned to upgrade 24 airports by 2009 and 11 by 2010, with a total investment of more than Rs10,000 crore.
Legwork: An aircraft being repaired at the Amritsar International Airport. Companies such as Tata Power and Reliance Energy have qualified to participate in bidding for the Amritsar and Udaipur airports.
“When the government first invited RFQs (requests for qualification), it planned to give the mandate to the winning bidder for commercial operations, maintenance of terminal buildings, cargo management and city-side development. Now, it wants to give only for cargo management and city-side development,” said a person familiar with the development.
“This will not only discourage international partners, but will also derail the non-metro airport modernization project,” he added, asking not to be identified. “Changing the terms and conditions of the modernization programme, after the government pre-qualified private players, is equal to changing the goalpost after starting a game,” said Kapil Kaul, chief executive (Indian subcontinent and West Asia) of Centre for Asia Pacific Aviation, an international aviation consulting firm. “Handling cargo and city-side development will result in mere real estate development than airport development,” he said.
A senior government official said nothing has been finalized on changing the terms and conditions, though there is a provision to do so.
The Airports Authority of India (AAI) has pointed out major human resources problems with the private companies taking over commercial operations and maintenance of terminal building, city-side development and cargo handling. “The fear of labour unrest and re-allocation of these AAI staff have resulted in changing the rules of airport modernization,” said a person familiar with the move.
A senior executive of the Tata group, who did not wish to be identified, said this would send wrong signals to domestic and international investors. “As per our understanding and last meeting held with ministry officials, the maintenance of terminal buildings will be taken out from private participation and would remain with AAI. Though this will not have a major financial impact, it will affect smooth operations of terminal activities. Needless to say, this will hurt the sentiments of investors,” he said.
“Sincerely, we don’t want to make these airport projects as real estate projects. Therefore, we are specifying private players to set up only airport-related activities at the airport surroundings,” said V.K. Kalra, executive director with AAI, who is responsible for key infrastructure development. “We will not certainly allow to use the airport space for housing colony or residential complexes,” he said.
Kalra admitted there are discussions between private companies bidding for airport modernization and the ministry of civil aviation. “The short-listed companies and representatives of the government met last week to finalize the terms and conditions,” he said, adding a second meeting is set for next week.
“Modernizing 35 non-metro airports is first type of experience for India,” Kalra said. “Therefore, we are busy in fixing the responsibilities among us and private players. There will be a consensus in next week’s meeting about responsibilities of development of airports,” he added.