Differences within the government are delaying the process of privatisation of Delhi and Mumbai airports.
A case in point being the civil aviation ministry and Planning Commission's recent demand to include a clause providing comfort against any adverse tax impact for those operating the airport.
Officials said the finance ministry had objected to the demand saying that tax was a business risk, which any sector was always exposed to. "In case we include the clause, there will be demands from other sectors as well," a government official said.
Officials also said the finance ministry was in favour of putting in place definite bidding parameters, but the civil aviation ministry wanted it left to the regulator.
The finance ministry has also raised the user charges issue as it is of the opinion that without the terms being made clear, it would not be possible to calculate the viability gap assistance that the government has to provide.
"You can expect the government to provide viability gap funding if the company running the airport has a gold plated structure and is unable to recover the cost through adequate levies," a finance ministry official said.
The government had proposed to finalise the bid document, the technical bid papers, the lease agreement, the joint venture agreement, and the request for proposals document by February, but ministry differences had delayed the process. The details of the agreements are now being discussed at official level.
The suggestion of the empowered group of ministers to allow the first right of refusal to the bidder has also not found the consent of the North Block.
Under this clause, the company operating the Mumbai or the Delhi airport will have the right to match the bid for any new airport in the vicinity (for example in Navi Mumbai). Officials said this would not encourage serious bidding for the new airports.
In addition, officials also said the plan panel and the finance ministry did not agree to the civil aviation ministry's proposal to leave the task of removing slums and recovering land for airport expansion to the company operating the airport.
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