After spending nearly Rs 5,000 cr public money, UPA plans to privatise 15 airports for a song
As the countdown starts to the next general elections, the UPA government is heading towards privatising 15 major airports in the country which are now being managed by the Airports Authority of India (AAI).
The most distressing point about the deal is the fact that only a few months back, the public sector AAI had spent more than Rs 5,000 crore in modernising all these airports (which include Kolkata, Chennai, Ahmedabad, Lucknow, Jaipur, Bhubaneshwar). The question is – what was the tearing hurry in privatising so many airports after spending this kind of public money on modernising them.
This has, expectedly, raised alarm bells in political circles. Interestingly, Delhi and Mumbai were privatised and the liability of modernising the airports was with private players. AAI still holds 26 per cent stake in Delhi and 49 per cent in Mumbai.
On Thursday, there was an interministerial group meeting on this issue at the civil aviation ministry office, with representatives from the planning commission, finance, law and aviation ministries. The group principally gave a green signal to this privatisation process. Political observers feel that this was a well planned strategy devised by leaders to not finalise the various maintenance contracts, particularly in Chennai and Kolkata airports, mostly in the F&B Duty Free shops. This has caused a serious problem in providing facilities to air passengers. Now this intentional delay has been used for privatising this contract.
To deflect a political crisis, this time the government has planned to retain all Airport Authority of India staff but has no clue how they will be utilised. Already, a huge number of AAI employees are loitering without any specific job profile at Rajiv Gandhi Bhawan (headquarter of AAI).
This privatisation move is going to generate a bitter political storm as Tamil Nadu CM J Jayalalithaa and West Bengal CM Mamata Banerjee are against the move. But political observers do not rule out huge financial transactions to offer such a sweet deal to private parties who will be given these huge contracts without having to invest any more money.
Important airports now under the AAI like Kolkata, Chennai and Jaipur airports, have large amounts of surplus lands which can be commercially developed and private operators can make a killing by offering peanuts to AAI’s coffer.
Civil Aviation Ministry sources say this move will generate additional income for AAI. What they do not answer is – what was the need then to develop these airports in the first place with public money. Interestingly, the CAG has already pointed out in a report that private operator GMR had raised Rs 18,00 crore by imposing a fee from the pockets of air passengers for funding airport projects, which was not a part of the original tender. GMR floated another eleven joint venture companies in which GMR itself were part owners like from parking to duty free shops and the balance sheet of those joint ventures were never shown to airport authority officials.
AAI defends the move saying it will earn more money from the airports now than what it did when it operated them on its own.
The political embarrassment for the UPA has grown manifold after CBI investigators tracked a powerful middleman named Shahzada, who happens to be a close associate of a union minister and carried on huge financial transactions on all civil aviation deals – from permission for importing aircraft to building height clearances in and around Mumbai airports to finalising privatisation deals.
Whether the CBI sleuths will be allowed to go ahead to investigate the ‘all powerful’ Shahzada,
however, remains to be seen.
The most distressing point about the deal is the fact that only a few months back, the public sector AAI had spent more than Rs 5,000 crore in modernising all these airports (which include Kolkata, Chennai, Ahmedabad, Lucknow, Jaipur, Bhubaneshwar). The question is – what was the tearing hurry in privatising so many airports after spending this kind of public money on modernising them.
This has, expectedly, raised alarm bells in political circles. Interestingly, Delhi and Mumbai were privatised and the liability of modernising the airports was with private players. AAI still holds 26 per cent stake in Delhi and 49 per cent in Mumbai.
On Thursday, there was an interministerial group meeting on this issue at the civil aviation ministry office, with representatives from the planning commission, finance, law and aviation ministries. The group principally gave a green signal to this privatisation process. Political observers feel that this was a well planned strategy devised by leaders to not finalise the various maintenance contracts, particularly in Chennai and Kolkata airports, mostly in the F&B Duty Free shops. This has caused a serious problem in providing facilities to air passengers. Now this intentional delay has been used for privatising this contract.
To deflect a political crisis, this time the government has planned to retain all Airport Authority of India staff but has no clue how they will be utilised. Already, a huge number of AAI employees are loitering without any specific job profile at Rajiv Gandhi Bhawan (headquarter of AAI).
This privatisation move is going to generate a bitter political storm as Tamil Nadu CM J Jayalalithaa and West Bengal CM Mamata Banerjee are against the move. But political observers do not rule out huge financial transactions to offer such a sweet deal to private parties who will be given these huge contracts without having to invest any more money.
Important airports now under the AAI like Kolkata, Chennai and Jaipur airports, have large amounts of surplus lands which can be commercially developed and private operators can make a killing by offering peanuts to AAI’s coffer.
Civil Aviation Ministry sources say this move will generate additional income for AAI. What they do not answer is – what was the need then to develop these airports in the first place with public money. Interestingly, the CAG has already pointed out in a report that private operator GMR had raised Rs 18,00 crore by imposing a fee from the pockets of air passengers for funding airport projects, which was not a part of the original tender. GMR floated another eleven joint venture companies in which GMR itself were part owners like from parking to duty free shops and the balance sheet of those joint ventures were never shown to airport authority officials.
AAI defends the move saying it will earn more money from the airports now than what it did when it operated them on its own.
The political embarrassment for the UPA has grown manifold after CBI investigators tracked a powerful middleman named Shahzada, who happens to be a close associate of a union minister and carried on huge financial transactions on all civil aviation deals – from permission for importing aircraft to building height clearances in and around Mumbai airports to finalising privatisation deals.
Whether the CBI sleuths will be allowed to go ahead to investigate the ‘all powerful’ Shahzada,
however, remains to be seen.