The aviation ministry is likely to take a decision on Friday on the model concession agreement (MCA) to be followed for the privatisation of six airports. Aviation minister Ajit Singh has called a meeting to finalise the MCA, a guiding document for privatisation process of Chennai, Kolkata, Guwahati, Lucknow, Jaipur and Ahmedabad airports.
“The meeting has been called by the minister to finalise the MCA for the airport projects to be awarded before the end of this fiscal,” said a aviation ministry official. It will be attended by officials of the aviation ministry and Airports Authority of India.
The process of award of these six airports is running behind schedule and dates for submission of documents for Kolkata and Chennai airports has been extended. According to the timeline set by the Prime Minister’s Office, the concession agreements were to be finalised by October 15, 2013. The process of compilation of MCA has led to differences between the civil aviation ministry and the Planning Commission.
Differences between the two wings of the government surfaced after the Planning Commission proposed a model of fixing landing and parking charges at airports prior to the award and linking its increase to the wholesale price index (WPI). The civil aviation ministry opposed to it on the grounds that linking it to WPI introduces an upward bias to them. Also, the sector has a regulator to decide on the charges at all the major airports in the country. Any airport that caters to 1.5 million passengers or more annually is a major airport. Any move to prefix charges would have meant bypassing the act that mandates the sector regulator Airports Economic Regulatory Authority to decide on charges. The two departments have also differed on the issue of including the revenues coming for development of hotels and conventions centres situated on airport premises.
The Plan panel is of the view that revenues coming from hotels at the city side of the airport should not be shared with the government. The aviation ministry has, however, favoured sharing it with the government.