The Hindu Business Line : `Left complaints on airport modernisation will be studied'

THE Minister for Civil Aviation, Mr Praful Patel, today said that the process of restructuring and modernisation of the Delhi and Mumbai airports was based on transparent procedures, even as the Left parties called on the Government to scuttle the process.

Replying to a calling attention motion in the Lok Sabha on the `Government's decision to engage private companies to modernise and operate airports in Delhi and Mumbai,' the Minister said that the process had gone through "considerable considerations" and the best professional consultants were appointed by the Airports Authority of India (AAI) after the bids had been invited for this purpose.

"The report of the consultants and the Government Review Committee are currently being reviewed by the Inter-Ministerial Group. The Empowered Group of Ministers will take a decision regarding the technical pre-qualification of bidders based on the report of the IMG after which the financial bids concerned would be opened to select the successful bidders," the Minister said.

Justifying the Government's decision, Mr Patel said that the current modernisation and restructuring transaction of the two airports envisages an upfront payment of Rs 150 crore from each airport and a minimum of five per cent of gross revenues on a year-to-year basis to the AAI.

Besides, after the transaction, the overhead cost of the AAI is also expected to reduce significantly, the Minister said.

AAI cash inflows: "As per an expert analysis carried out by consultants, the current value of cash flows to the AAI under the joint venture company route for the forecast period of 30 years is significantly positive. In the scenario where the AAI undertakes the development of the two airports on its own, the current vale of free cash flows from the airports would have been negative," he added.

The Minister also said that if the AAI were to invest its own funds in modernisation of Delhi and Mumbai airports, it would not be in a position to take up development of 35 non-metro airports that would require at least Rs 5,000 crore.

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