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No early airport upgrades as govt seeks bigger role for AAI

12 November 2014

Travellers will not see any quick transformation of the Chennai and Kolkata airports, as the ministry of civil aviation is yet to zero in on a method to develop and operate the airport even as it seeks to avoid the public-private partnership (PPP) route used to modernise the Mumbai and Delhi airports.

The option being considered now is to give a management contract to private investors but with a strong role for the Airports Authority of India (AAI). Unlike the model adopted in Mumbai, Delhi and Bangalore, which allowed operators to decide on hiring and retrenchment of staff, the plan is to ensure government oversight.

The draft civil aviation policy, which was unveiled by the ministry on Monday, calls for suggestions from stakeholders so that a final call can be taken in January. But it does not lay down how the public private partnership (PPP) model will be followed at Chennai or Kolkata (See: Airports to be developed as integrated multi-modal hubs).

It is apparent however that airport modernisation through PPP has taken a back seat. Only two of six airports earlier earmarked are to be given on 30-year lease to private developers. These are at Jaipur and Ahmedabad. Guwahati and Lucknow have been put on back burner.

The Chennai airport has two new terminals, but much of the work remain unfinished - a travelator connecting the two terminals, renovation of the old terminals and the straightening of a taxi track near the cargo terminal. All this may require an additional investment of Rs1,500 crore.

Though the ministry's plans are based on the notion that the airport should not be handed over completely to a private company because Rs2,200-2,800 crore has already been invested by AAI to modernise terminals and the cargo complex, lack of a clear cut policy is likely to cost the facility.

A senior official reportedly said the idea of handing out management of the terminals and a few other services to private firms was originally mooted by former chairman of AAI V P Agrawal, who wanted the public sector operator to have more control over the airports.

After five months, it's clearly back to square one for Chennai. Still, union civil aviation minister Ashok Gajapati Raju has said that "we may go in for management contracts at Chennai." He had earlier said in September that the ministry was not enamoured with privatisation but was not averse to it.

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