Airport privatisation: Ministry gives final touches to agreement

Written by Press Trust of India | New Delhi | Updated: Nov 9 2013, 11:07am hrs
Amid reports of delay in the privatisation process of six airports, civil aviation ministry on Friday gave final touches to the concession agreement to be signed with selected bidders, while differing on certain crucial proposals of the Planning Commission.

"We discussed the matter and the new set of proposals will now be put into the legal format," civil aviation minister Ajit Singh said after a meeting here.

The meeting came a week after the deadline for short-listing of bidders for privatisation of the five airports, including those at Kolkata and Chennai, were deferred by almost two months.

The dates were advanced only for the Lucknow airport. All these airports have already been modernised by Airports Authority of India (AAI).

Official sources said the ministry disagreed with the Planning Commission's model concession agreement on issues like revenue sharing, 'shared till' and the period of lease.

While the plan panel wanted the selected private party to share with AAI only the aeronautical revenue, the ministry sought that the entire revenue, earned from aeronautical and non-aeronautical sources, like hotels, shops and eating joints, should be shared with AAI.

The ministry insisted on shared till advocating that non-aeronautical revenue should be used for cross-subsidising airport tariff charged from users like airlines and passengers.

It also sought that the airports should be leased for a period of 30 years and an extension for another 30 years be given only after a review of the work done by the selected bidder.

Besides Lucknow, Chennai, Kolkata, the other airports on the block for privatising their operations and management are those at Jaipur, Guwahati and Ahmedabad. The final proposal of the ministry in the legal format would be sent to the project development committee.