Cabinet to decide upon airport privatisation

NEW DELHI: The final decision on privatisation of the four metro airports would be left to the Union Cabinet, civil aviation minister Shahnawaz Hussain said on Friday.In view of the proposed change in the privatisation model, the concerned departments -- the civil aviation ministry, the law ministry and the Planning Commission -- have decided to refer the issue to the Cabinet.In view of the delay in amending the Airport Authority of India (AAI) Act, the concerned departments decided to go in for an alternate model. Just before quitting the government to become the BJP spokesperson, former law minister Arun Jaitley had cleared a plan to set up separate joint ventures for the four airports with AAI holding a stake in all the new companies.In view of the change in the privatisation model, we are approaching the Cabinet for fresh directions, Mr Hussain said. After obtaining formal approval from the Cabinet, the civil aviation ministry will move ahead with global tenders.The law ministry's advise to go in for privatisation without pressing for amendments to the AAI Act puts an end to the leasing plan which was under consideration since last year.The amendment was being pursued since the current law does not allow leasing of airports to private parties. The legal tangle has been delaying the ambitious privatisation exercise, aimed at upgrading services at the four international airports by drawing corporate investment and management.Once separate joint ventures are set up under the revised plan, the management will be handed over to private players while AAI would retain air traffic control and security operations. Investment from private parties, the return on their investment and royalty to AAI would be managed from the revenue generated by each airport.By making AAI a partner in these companies, the law minister feels, there will be no need to go through the process of amending the AAI Act.The amendment bill was introduced in Parliament last year and referred to the standing committee on transport and tourism. It has not been cleared yet and many members of the Committee are upset over the government's decision to organise roadshows in London and Delhi to attract investors.The roadshows should not have been organised before the amendment was cleared by Parliament, these members feel. This amounts to taking Parliament for granted, they have indicated to Mr Hussain and officials of the ministry. With the fate of the bill turning uncertain, the concerned departments started looking for alternate options.While the privatisation model would differ, the civil aviation ministry is keen to ensure flow of private investment and allow foreign direct investment (FDI) up to 74 per cent. The ministry is also keen to cut down delays in the privatisation to ensure early flow of private investment to expand capacity and upgrade infrastructure at these airports.

Cabinet to decide upon airport privatisation

The final decision on privatisation of the four metro airports would be left to the Union Cabinet, civil aviation minister Shahnawaz Hussain said on Friday.

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