Review of concessions to private firms for developing airports

NEW DELHI: In the face of new challenges posed in aviation security and safety, the government will soon take a "fresh look" at the concession agreements signed with private parties on developing airports in the country.

However, the concession agreements already in existence with private players which govern the running of major airports like those in Delhi, Mumbai, Hyderabad, Bangalore and Cochin may not be disturbed.

"We are planning to review all the concession agreements. ....there is a need to have a fresh look to make them better," Civil Aviation Secretary Nasim Zaidi said at a conference of airport operators from Asia-Pacific here.

"Don't worry, it is not a threat to you," he immediately told the head of GMR-led Delhi International Airport Limited, Kiran Kumar Grandhi, who was seated on the dais at the function.

Observing that the aviation and airport sector would require USD 30 billion worth of investments in the next 15 years, he said with the massive increase in air traffic, the development of new greenfield airports and upgradation of existing ones have thrown up new challenges.

Issues like capital availability of the airport developer and greater coordination between different agencies working at the airports would be stressed or incorporated in the fresh concession agreements that may be entered into between private firms, Airports Authority of India and the government.

These issues would be examined by the Civil Aviation Economic Advisory Council shortly, he said.

Later, Zaidi told PTI that the Association of Private Airport Operators (APAO), a body of Indian airport operators, had taken up various issues and made several suggestions which would also be considered in the process of reviewing the concession agreements.

He said various models of airport development were being implemented at different airports including public-private partnership (PPP) which is facing "serious issues".

The APAO has raised reservations on suggestions that the private-led joint venture airport companies be brought under the ambit of statutory audit by the government, the Right to Information should also apply to them and regulatory approaches be evolved for determination of airport tariffs.

"We will address these issues and concerns in an appropriate manner," the Civil Aviation Secretary said.

Noting that the new airports being developed would need to be filled up with increased air traffic, he said "gradual calibrated liberalisation" process would be required to meet this need.