The employees and union leaders of State-owned airport operator Airports Authority of India (AAI) are an anxious lot these days. The news coming in from Delhi — the move to revive the Key Infrastructure Development (KID) cell to take forward the modernisation of Chennai and Kolkata airports and the announcement made at a meeting chaired by Prime Minister Manmohan Singh on finalising infrastructure targets for 2013-14 — have apparently unnerved them.

At the Prime Minister’s meeting held in Delhi on Friday it was decided that airport operations and maintenance through Public-Private Partnership (PPP) contracts will be introduced in some AAI airports, including Chennai, Kolkata, Lucknow, Guwahati, Jaipur and Ahmedabad.

Delhi and Mumbai

In 2005, during the tenure of UPA I, the KID cell was established as the focal point to take the modernisation of Delhi and Mumbai airports forward. KID set up the data room where all the information on past and future traffic flows of the two metro airports, and how much land was available at the two airports was collated. It also requested the modernisation proposals for these two airports.

But after the contracts for the two airports were awarded — Delhi to the GMR-led consortium and Mumbai to the GVK-led consortium — the KID cell was wound up. Now with the decision to re-establish the Cell, AAI employees fear that besides the metro airports in Chennai and Kolkata, those in other cities may slip out of their hands as well, thus affecting the financial viability of the organisation.

AAI’s Loss

This is a point emphasised by Balraj Singh Ahlawat, General Secretary of the Airports Authority Employees’ Union, according to whom privatisation of the Kolkata and Chennai airports will hit AAI’s profits “badly”.

“Of the 120 airport facilities operated by AAI, only seven airports, including Kolkata and Chennai, make profits from services. If the management of Kolkata and Chennai airports is privatised, the Authority will lose out on a substantial share of its earnings,” Ahlawat told Business Line .

Ahlawat has a point as in the case of Delhi and Mumbai, the airports have been given to the new joint venture companies for a period of 30 years, each of which can be extended by another 30 years. At the moment there is no clarity on the number of years for which the other airports which the Government wants to modernise through the PPP route will be given to the consortiums running them.

Putting on a brave face, another AAI union leader said that while the employees were not unduly worried about their jobs yet, they were unhappy over the manner in which airport assets on which several thousands of crores had been spent recently will be taken away from them and handed over to the private sector.

In Delhi, where AAI is headquartered, officials went on record to say that the move to modernise airports through the PPP route is in line with what has been announced by the Civil Aviation Minister. But goad them a bit and they too are a bitter lot.

AAI needs flexibility

“We work in constant fear of getting an adverse comment from the Comptroller and Auditor General (CAG) or the Central Vigilance Commission (CVC). Give us the flexibility and freedom and financial leeway that have been provided to the private sector and then let us see who is better at managing airports,” a senior AAI official said.

There are also other reasons for employee angst . For privately-managed airports, new revenue streams, such as being allowed to levy a fee on passengers, are cleared fast while for AAI-managed airports, the same process takes months or sometimes even years.,

Many claim that the private parties that will be involved in airport development will be more interested in earning money through the development of land around the airport and building hotels and shopping malls rather than looking at increasing air connectivity and earning money by increasing traffic. In another significant move, the Government has asked AAI to help draft a concession agreement for private sector participation in airports.

This decision has been taken because the CAG hauled up the Government for the manner in which the concession agreement was drawn up for the Delhi and Mumbai airports, including allegedly giving away land at highly undervalued prices to new joint ventures companies which are running the two metro airports.

AAI employees see this as making the process of modernising and managing airports by the private sector even easier.

the landlord

AAI officials point out that if this process is allowed to go ahead, the airport operator will soon become a landlord living off the money that it gets as rent from the various airports in which it is a mere partner across the country. They then will have nothing to do with actually running the airports efficiently.

At the moment all eyes are on the Chief Ministers of Tamil Nadu and West Bengal because a no from them could stop the proposals for the Chennai and Kolkata Airports. Meanwhile, employees and their unions are thinking of ways to safeguard their own interests.

raja.simhan@thehindu.co.in

ayan.pramanik@thehindu.co.in

(With inputs from Ashwini Phadnis in New Delhi)

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