The delay in shortlisting successful bidders for the modernisation of six airports, including the one in Chennai, is probably a blessing in disguise for the government. It should now give the Ministry of Civil Aviation enough time to finalise a document that will be acceptable to all parties, and not lead to litigation at a later stage, as was the case during the modernisation of Delhi airport.
The Ministry’s deadline of January 7 to finalise the list of bidders for Chennai was not met. Given that it takes about three months from the time a successful bidder is chosen to handing over the airport for modernisation, it is highly unlikely that the process will be completed under UPA-II.
The delay has been caused by differences between the Civil Aviation Ministry and the Planning Commission. The latter wanted any increase in airport landing and parking charges to be linked to inflation. However, the Ministry felt the Airports Economic Regulatory Authority (AERA) should decide on the rates based on the Internal Rate of Return (IRR).Now the government will be well advised to come up with a structured format for deciding on how these and other airports should be given out to private parties so that the interests of passengers as well as the private sector and the Airports Authority of India (AAI) are taken care of.
14/01/14 Ashwini Phadnis/Business Line
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The Ministry’s deadline of January 7 to finalise the list of bidders for Chennai was not met. Given that it takes about three months from the time a successful bidder is chosen to handing over the airport for modernisation, it is highly unlikely that the process will be completed under UPA-II.
The delay has been caused by differences between the Civil Aviation Ministry and the Planning Commission. The latter wanted any increase in airport landing and parking charges to be linked to inflation. However, the Ministry felt the Airports Economic Regulatory Authority (AERA) should decide on the rates based on the Internal Rate of Return (IRR).Now the government will be well advised to come up with a structured format for deciding on how these and other airports should be given out to private parties so that the interests of passengers as well as the private sector and the Airports Authority of India (AAI) are taken care of.
14/01/14 Ashwini Phadnis/Business Line
