Bidding for privatisation of 6 airports deferred again

Feb 15 2014, 23:57 IST
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The bidding process has been postponed once again till mid March. Reuters The bidding process has been postponed once again till mid March. Reuters
SummaryThe bidding process has been postponed once again till mid March.

Putting a question mark on the entire project of privatising six major airports developed by Airports Authority of India (AAI) including Kolkata and Chennai, the bidding process has been postponed once again till mid-March.

This is the third postponement since November last year when the process was formally started, official sources said today.

Problems have arisen on the drafting of the concession agreement which is to be signed between the selected private party, the AAI and the Civil Aviation Ministry to give effect to the contract, the sources said.

The due date of application for the Request for Qualification was pushed earlier from January-end to February 17 for four airports at Chennai, Kolkata, Lucknow and Guwahati and to February 12 for Jaipur and Ahmedabad. These dates in February have now been further postponed to March 17.

The latest postponement effectively implies that the bid process may have to be taken up only after the upcoming general elections by the new government.

The Model Code of Conduct is likely to be in place by the first week of March, they said, adding that the government cannot take any policy decision once the code is in place.

In order to fast-track the privatisation of the airports, the government had invited applications from the private sector in September last year, marking a major policy shift.

But in November, the process was postponed by two months till January, then to February and now March.

Several private and foreign infrastructure firms like IL&FS Transportation Networks, Essar Projects India, Cochin International Ltd, Essel Infraprojects Ltd, GVK, Fraport, Saudi Arabia, GMR Airports Ltd, Sahara Group and Turkish firm Celebi Habacilik Holding AS, have evinced interest in these airport projects.

All these airports have already been modernised by AAI at a high cost to the exchequer. The modernisation of Kolkata and Chennai airports had cost the AAI Rs 2,325 crore and Rs 2,015 crore respectively.

The move has come under severe criticism from several quarters, including AAI employees, trade unions, some political parties, airlines and their global representative body, International Air Transport Association.

The privatisation plans also received a blow with the Parliamentary Standing Committee on Transport, Tourism and Culture adopting a report opposing the move and advocating long-term management contracts instead of leasing the airports out to private parties for three decades.

In its latest report last week, the Public Accounts Committee (PAC) of Parliament had also questioned the government over the public-private partnership (PPP) to develop and

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