Alternate plans take wings for other airports

The government is looking at various options such as public-private partnerships or asking the Airports Authority of India for the modernisation of Chennai and Kolkata airports.

These models are being contemplated as the government has decided not to undertake outright privatisation of the two airports to modernise them.

Another model under consideration is allowing the AAI to participate in a competitive bidding process to modernise the two airports. The company that will modernise the airports will be decided on the basis of the bids.

"The AAI has reserves, but the whole of it cannot be used in developing a few airports. We can look at the public-private partnership model in developing the other two airports," said a civil aviation ministry official.

In addition, the government also wants to make sure that in the case of the two airports, whichever be the method that is adopted to modernise them, it would take enough safeguards to ensure that none of the AAI employee will face job loss or any change in employment conditions.

The Centre also wants to engage the state governments in the entire modernisation process. "The modernisation of these airports will be undertaken in complete consultation with the two state governments," said the official.

According to civil aviation ministry officials, another alternative is to set up a special purpose vehicle on the lines of the Delhi Metro to develop Chennai and Kolkata airports. Kolkata and Chennai are part of the long list of airports, which includes 35 non-metro ones that the government plans to modernise in phases.

According to the model under consideration, foreign airport companies, Indian companies and financial institutions will be allowed to be part of the SPV. These companies will have an equity stake in the SPV.

Under the present policy, in the case of Delhi and Mumbai airports, the government has allowed 74 per cent private equity participation with a 49 per cent foreign equity. In the case of greenfield airports, foreign equity is permitted up to 100 per cent.