People's Democracy

Parliamentary Committee Against Closure Of Hyderabad & Bangalore Airports

?Renegotiate With Private Developers?

K Veeraiah

DEPARTMENT related parliamentary standing committee on civil aviation unanimously recommended to the central government not to close down the existing airports in Hyderabad and Bangalore. It also asked the government to renegotiate with the private developers of new greenfield airports at these places in order to keep the existing airports running.

Sitaram Yechury, MP and chairman of the standing committee announced this while addressing a press conference in parliament house on March 05, 2008 after submitting the standing committee report to the parliament. Explaining the rationale behind such demand, he informed the media that the Concessional Agreement signed with the private developers for building greenfield international airports at Hyderabad and Bangalore was based on the expected traffic flow. As per the estimations then, the growth in traffic would be around 6 per cent. But today civil aviation sector is growing at the rate of 20 per cent per annum. The committee felt that if this trend continues then in a couple of years even the upcoming green field international airports would also reach their saturation point as their construction is geared to meet the demand of 7 million passenger flows only. In that case to facilitate the passenger amenities and ensure smooth running of airports, the government has to look for alternatives, felt the committee.

Moreover, Yechury pointed out that if the existing airports which are in the heart of city closed down, the passengers will have to face serious trouble such as increase in travel time, higher charges to reach their destination etc. He said that the air travel time between Hyderabad and Bangalore is around 30 minutes while to reach the new international airports from the two cities would take more than 2 hours. The committee felt that this is not at all a passenger friendly development.

Keeping the enormous growth in civil aviation sector in view the committee recommended that the present airports should be used in such a way that the government discharges its responsibilities of maintaining public good and upholding public interest. It termed the agreement made by the government with the private developers as faulty because it legally compels the government to close down the existing airports from the date of inauguration of new airports. The committee took strong objection to government decision to close down the airports that were built with public money and are servicing the nation for more than 3 decades. It stated that this measure is aimed only at facilitating more profits for private airport developers. The committee also felt that this whole logic defies the principle of competition on which the government relied heavily to promote the private developers in the field of airport construction and maintenance.

Yechury criticised the government for allowing the private developers to collect user development charges of Rs 700 per passenger. He pointed out that a similar proposal made by the Airports Authority of India (AAI) to augment its reserves to modernise the airports, the government had turned it down. However in the case of private developers, the government has allowed the same. This anti-public sector policy must be reconsidered, demanded Yechury.

The committee also studied the difference between consessional agreements of Hyderabad, Bangalore, Delhi and Mumbai airports. In the agreements relating to Delhi and Mumbai international airports, there are certain provisions to absorb the existing employees while this was not incorporated in the case of Greenfield airports. Yechury demanded the government to think of the more than 600 employees who will be affected in the event of closure of existing airports at Hyderabad and Bangalore. As the new Hyderabad airport is going to be inaugurated on 15th of this month, Yechury felt that the situation warrants urgent intervention from the government. He suggested that the tripartite mechanism which is in existence to settle the disputes between the management, government and workers must be entrusted with the job of settling the issue of employees at Hyderabad and Bangalore also.

On the issue of operational and financial freedom to Airports Authority of India, the standing committee demanded the government to allow AAI to compete with the private developers on even terms. In the bidding process for Delhi and Mumbai airports, the government did not even allow the AAI to participate thereby facilitating the smooth process of privatisation. Yechury saw a pattern in the steps being taken by the government vis a vis AAI. The AAI earns much of the revenue from the four metro airports and then cross subsidises the non metro airports. The government, earlier by not allowing the AAI to modernise the Delhi and Mumbai international airports and now by allowing the closure of existing airports at Hyderabad and Bangalore, is ensuring that the AAI became a loss making PSU. He expressed the fear that this will result in reviving the process of privatisation. To avoid this Yechury demanded the government to give AAI financial and operational freedom and thus allow it to be a self sustaining organisation on its own.

While responding to a question on renegotiation with the developers, Yechury said that the government should come forward for this even if it entails certain financial obligations because such obligations would be less when compared with the smooth running of airports. Responding to another question about disregarding of these recommendations by the government, Yechury expressed the committee?s inability in enforcing the implementation of its recommendations. He informed that the recommendations of the committee are non binding. However ignoring these recommendations altogether is also not possible in the democratic set up. He expressed his anguish about the government?s response to the committee?s earlier recommendations where it categorically stated that the closure of existing airports clause should not be honoured. Replying to a query on continuous strike notice issued by the employees of existing airports from 10th of this month, Yechury said that if the government ignores the unanimous recommendations altogether, other options of pressurising the government to act in the interest of people would be exercised.