Getting the auction right
This is the story of the biggest audit the CAG never did. It shows how, in India, both the auditor, and the executive it is supposed to pull up, work more like accountants than policymakers. They make essentially the same mistakes that cost the country dear and make an irrefutable case for an auction-led policy.
The story begins somewhere around the time India had begun to develop its major airports by adopting the public-private partnership model in the early 2000s. The mandarins of civil aviation and the finance ministry did a pretty sloppy job with the first of those, the Bangalore airport. The next one, Hyderabad, was better executed. Then, work began on the Delhi and Mumbai airports almost simultaneously.
The Delhi airport contract was relatively easy to negotiate, as there were kilometres of barren land available around the then puny airport to build the larger entity on. The key decision was on Mumbai. There was no land around the domestic or international terminals to accommodate the expected burst in passenger traffic. Yet, instead of deciding on a new airport for Mumbai, the government spent months working out how to use the land around the Delhi airport — a far less significant issue — and the expansion of the capacity of the current Mumbai airport.
The result is that when the auditor came calling, it was fascinated by the story of land around the Delhi airport, had little to observe about the commercial rationale of the airport, and completely ignored the real land
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