People's Democracy(Weekly Organ of the Communist Party of India (Marxist)
April 30, 2006
PRIVATISATION OF DELHI & MUMBAI AIRPORTS –
OF TRUST BY THE UPA GOVT
it been so companies like IISCO, Braithwaite, Burn Standard, Richardson Crudus,
NTC, NJMC etc. could have been modernised by private owners only.
It did not happen and today the government has to take up the job of
upgradation/modernisation of some of these industries. Along with 100 and odd
PSUs, more than 4000 sick medium/large-scale industries in private sector stand
referred to BIFR because of lack of modernisation.
Private or public ownership has nothing to do with modernisation.
Authority of India Act was passed in parliament in 1994-95 to bring the four
metro airports viz Delhi, Mumbai, Kolkata and Chennai belonging to International
Airports Authority of India and other airports belonging to National Airports
Authority under one umbrella viz. Airports Authority of India with the declared
object, which read as follows:
airports are put to more intensive use and generate substantial revenues which
accrue to International Airports Authority of India.
Revenues of National Airports Authority of India are much less buoyant
because a number of airports do not have the commercial air services whatsoever,
while many others have only infrequent operations.
The National Airports Authority has therefore, not been able to generate
adequate resources to meet the requirements of development and modernisation. To
overcome this handicap and provide for closer integration in the management of
airports and air traffic control, it has been found necessary to merge the
International Airports Authority of India with the National Airports Authority
the merger processes were completed in 1998. But in the same year i.e. in 1998
when the NDA government came to power, it was decided to demerge Delhi, Mumbai
airports for the purpose of privatisation on the plea of modernisation. Though
the said decision was taken by the NDA government, the same is
being given effect to by the UPA government led by Congress party which
had decided earlier for merger. Mohamed Bin Tughlaq decided to shift the capital
from Delhi to Daulatabad in 1326 AD and
reversed the decision within a year.
History still ridicules him. How would the earlier and present government
explain the merging and demerging decision of AAI within a year? The present
government led by Congress owes a reply to the people of this country.
the time of formation of International Airports Authority of India as per the
Act passed in parliament in 1972, the mission of the Authority was to design,
construct and manage international airports for
providing service and facilities comparable to the highest international
standards thereby ensuring maximum satisfaction to various users in a
cost-effective manner.” The annual report of Airports Authority of India
(AAI), which are placed before parliament, declares its mission for
“progress to excellence and customer satisfaction with world class
1972 onwards the nation was being assured through parliament its capability of
making world class airports. Then all of a sudden who has decided in 1998 that
this is not possible? If the government reached the conclusion regarding
the incapability of Airports Authority of India in setting up and running
of the airports of international standards, it is obliged to amend the declared
mission of the Airports Authority of India and to apprise the parliament to this
effect. Also the government is responsible to explain to the entire nation the
parameters to determine the efficiency in providing the services to qualify as
world class and how and why Airports Authority of India fails to approach that
WHO STALLED THE MODERNISATION OF
need for modernisation of the airports not only in Delhi and Mumbai but also in
other metro airports as well as the non-metro airports was felt long back. In
1996, AAI sent a proposal for modernisation of Mumbai and Delhi airports.
The proposals were processed and then stalled in 1998 by the NDA
government without placing the same before the Public Investment Board (PIB).
In June 2003, the AAI Board approved a modernisation proposal costing
approximately Rs 3000 crore for Delhi and Mumbai airports. The NDA government
did not pursue the same on the logic of “no modernisation before privatisation’.
only that from 2001 onwards, all ongoing capital works for Delhi and Mumbai
airports by AAI were stopped through written directives from the civil aviation
ministry. Since 1998 numerous requests urging for capital works and proposals of
projects for Delhi and Mumbai airports have been turned down arguing that the
leasing privatisation process was to start.
From 1998 till date the Airports Authority of India was not allowed to
undertake any major modernisation job.
Now the government, backed by corporate media, is maligning the AAI and
its employees. The government’s callous approach is clear from the fact that
during the last decade there were prolonged periods when the AAI was headless
without a full time chairman. There was a sinister design in not allowing the Airports Authority of
India to modernise the Delhi and Mumbai and other metro airports until they are
handed over to the private players. In this mission of modern-isation via
privatisation , the UPA government has shown over-enthusiasm to fulfill the task
set by the earlier NDA government.
Airports Authority of India, based on the Joint Employees’ Forum’s proposal
for modernisation of both Delhi and Mumbai airports, had submitted its alternate
plan. The plan prepared by seven senior executives of AAI and forwarded by the
chairman, AAI to the civil aviation ministry had categorically
reaffirmed AAI’s technical and financial capacity to modernise Delhi,
Mumbai and 35 non-metro airports. But this was turned down by the government
without showing any reason. The AAI having a reserve of Rs 3000 crore and annual
profit of Rs 400 crore can easily
borrow Rs 9500 crore from the market for modernisation of not only Delhi
and Mumbai airports but also for non-metro airports. The organisation that has a
strong asset base can mobilise the required funds from the financial
institutions and banks and even could go for the 70:30 debt-equity mix where the
70 per cent will be debt fund and remaining 30 per cent will be equity. Instead,
the government has selected a party having much lesser financial base to share
the profits of the Delhi and Mumbai airports. And the modernisation projects of
this party will be in reality funded by the government’s debt as well from
banks like SBI, ICICI and many others. It is a clear case of privatising the
profits at the cost of the public exchequer.
- THE MAJOR TARGET FOR
facts reveal that the much-publicised concept of world-class airports has
nothing to do with the aeronautical services, but is centered on what is being
eyed as non-aeronautical
business indeed. It is the 2500 acres of land - 500 acres in Delhi and 2000
acres in Mumbai, which will be the major sources of earning revenue.
The AAI has so far been barred from utilising this prime land for
Now some one is taking over the airports with a meager Rs 500 crore to
mint money from real estate business. Airport modernisation is only a cover for
allowing builder and land mafia to have a go at the land assets of the AAI.
In the overall interest of the AAI as well as the country, the employees of AAI, under Joint Employees Forum, have been fighting a bitter struggle against this privatisation. Because of their struggle which led to an unprecedented agitation in all the airports throughout the country in the first week of February 2006, the prime minister had to intervene and the civil aviation minister through his letter dated February 4, 2006 had to agree to form a Tripartite Committee comprising representatives of the government, the AAI management and the Joint Employees Forum to discuss the restructuring proposals of airports by the AAI and other employee related issues. The committee was formed on February 22, 2006 and was asked to give its report within three months i.e. by May 22, 2006. Even before the committee had an occasion to discuss the substantive issue of restructuring of Mumbai and Delhi airports, the government forced the AAI management to sign the shareholders agreement with two private parties viz M/s GMR & GVK on April 4, 2006 in the evening hours in a hotel in Delhi. This conspiratorial action behind the back of the employees, exposes not only the breach of trust by the government but also its total lack of public accountability in handing over profitable pubic assets to a chosen few. “Breach of trust” is no matter for such public asset-dealers. This is no longer an issue for airport employees alone as this route of privatising profit-making PSUs would be followed by pro-privatisation regimes if not resisted at this stage.
has to be resisted by the working class so that the government is forced to
retrace its steps.
The fight against privatisation is a continuous process till the policy
is buried and the valiant struggle of the airport employees would definitely be
encouraging the future anti-privatisation struggles and further strengthen the
fight against the blind followers of neo-liberal policy of “privatization at