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This article was first published 9 years ago  » Business » Kolkata, Chennai airports unlikely to be privatised

Kolkata, Chennai airports unlikely to be privatised

By Sharmistha Mukherjee
November 07, 2014 13:08 IST
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The aviation ministry is unlikely to award management contracts for the airports at Kolkata and Chennai to private operators.

“The Airports Authority of India has invested a lot of money in upgrading the airports at Kolkata and Chennai. We are evaluating whether it would be appropriate to manage these airports through public-private partnership or some other model,” a senior ministry official said.

A decision is likely to be taken soon. Costs of upgrading the airports at Kolkata and Chennai were Rs 2,325 crore (Rs 23.25 billion) and Rs 2,015 crore (Rs 20.15 billion), respectively. 

But there have been complaints about the quality of work and management of operations at both airports.

The Kolkata airport can now handle 25 million passengers a year, a leap from the earlier capacity of 4.8 million. 

Apart from the 195,000-sq metre, five-level passenger terminal building, the airport has modern taxiways and an extended runway to handle bigger jets like the Airbus A-380.

The modernisation of the Chennai airport saw its annual passenger handling capacity go up to 23 million from 9 million.

With Kolkata and Chennai likely off the list, the ministry is now reviewing management contracts for the Jaipur, Guwahati, Ahmedabad and Lucknow airports. Once the modalities are set, the aviation ministry will seek approval from the inter-ministerial group to award contracts.

“One concern raised by stakeholders is the cost of turnaround of an aircraft at private airports in the country. The turnaround cost for a jet is around $6,000 at a private airport, whereas it costs $2,300 at Changi airport. We need to ensure that privatisation does not increase the cost of operations,” said another official at the MoCA.

Besides, the ministry is looking at issues raised by the Comptroller and Auditor General over the privatisation of airports in Delhi and Mumbai. “We are looking into these concerns. All this will be debated in the inter-ministerial group meeting,” the official added.

The process to award management contracts for six airports was initiated last year by the United Progressive Alliance government but had to be put on hold after the ministry and the Planning Commission differed over terms. 

The ministry has broadly framed the model concession agreement and the inter-ministerial group was scheduled to meet on September 4 to finalise it. The meeting was postponed because the new aviation secretary, V Somasundaran, assumed office only a day before. A new date is likely to be set soon.

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Sharmistha Mukherjee in New Delhi
Source: source

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