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Par panel criticises privatisation of AAI-developed airports

November 20, 2013 16:29 IST

Mumbai AirportCivil Aviation Ministry was on Wednesday rapped for privatising six AAI-developed airports, including Kolkata and Chennai, with a parliamentary panel today opposing the move and charging the government with doing ‘a great disservice’ by ‘using public property for private profits’.

Instead of giving away the airports to the private sector ‘on a platter’, state-run Airports Authority of India should form a subsidiary or a special purpose vehicle to grant management contracts to entities having expertise in the field, the panel recommended.

"Privatisation of airports is a great disservice being done to the country by this government.

“Public assets are being placed at the disposal for private operators. . .Undue haste is being shown in the process. . .we want to know from the government why it proceeded with that sort of haste as that leaves a scope for lots of issues to be interpreted," Communist Party of India-Marxist leader Sitaram Yechury told a press conference in New Delhi.

Yechury, who is Chairman of the Standing Committee on Transport, Tourism and Culture, was talking to reporters after submitting a report on airports privatisation to Rajya Sabha Chairman Hamid Ansari in New Delhi.

The report comes at a time when the process of privatising the airports at Chennai, Kolkata, Lucknow, Jaipur, Ahmedabad and Guwahati is underway.

"The Committee is dismayed that instead of strengthening AAI by giving it much needed financial and administrative autonomy to enable it to take its own decisions without being influenced/advised by either the Ministry or the Planning Commission, a decision to give our airports on platter to private parties was taken.

"The Committee fails to understand the logic behind privatising all these airports after spending tax payers' money for modernising them.

The public utilities created by public fund cannot be given to private parties

for commercial considerations," the report said.

The panel said it was "surprised to see the unusual haste being shown in the process of privatisation right from the constitution of Task Force, of three Inter-Ministerial Groups one after another, placing the matter before Cabinet and obtaining clearances, process of pre-bidding etc."

Yechury said, "we have seen that in 2012 and 2113, there was an undue haste shown suddenly to push ahead with this sort of privatisation which runs contrary to all decisions that were taken by the Committee on Infrastructure, headed by the Prime Minister."

The Committee also castigated the Planning Commission's model of public private partnership, with Yechury saying PPP actually implied "using public property for private profits. That seems to be the real PPP model."

The panel also did not buy Planning Commission's argument that the AAI would not be able to manage these airports and earn money and recommended that the public sector airports body should be empowered to take decisions on generating resources rather than handing over core activities of newly modernised airports to private players.

Giving an example, Yechury said, "Let the Kolkata airport be managed by Changi airport of Singapore but the AAI will retain ownership and enter into an agreement.

“There is no need to bring in private players who will take a share in the profits."

"The last single paisa which has been invested into modernising these two metro airports in Chennai and Kolkata and 35 non-metro airports, has been put in by the public sector.

“This is peoples' money and that money cannot be now made available to private sector for profit.

“That is wrong and therefore we have opposed that," he said. The privatisation of airports has also been opposed by several political parties, including the Left, with Janata Dal (United) chief and former Civil Aviation Minister Sharad Yadav also seeking immediate stoppage of the process, claiming that ‘undue haste’ was being shown to benefit "pre-determined parties".

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