Can do without chaotic decision-making

The Red Queen advised Alice: ?If you don?t know where you are going, any road will take you there.? The Alice in Wonderland story continues to unfold in the saga of the privatisation of the Delhi and Mumbai airports. The latest, one understands, is that all the bidders, especially those who have been considered technically unsuitable by the independent evaluators, are pressing for reconsideration and revaluation of their offers and for an opportunity to bid.

The story started with the announcement of privatisation of the two airports that was made by the then finance minister in the Budget speech in 2003. The then government was seeing the transformation being brought about by the Golden Quadrilateral programme on roads, and decided that infrastructure, including railways, ports and airports needed upgrading. For a year at that time, the administrative machinery struggled with the concept of doing something new. Finally, a paper was brought before the Cabinet in the closing days of the earlier government, and an approach to the process was approved that included calling for international competitive bids, with the need to have the bidders associated with an experienced airport operator.

Come 2004, and the new government saw initial hesitation, uncertainty, and a certain amount of distrust of earlier decisions. It was only towards the end of 2004 that the government rediscovered that the improvement of airports was indeed a good thing to do, particularly after opening up the skies to private airlines for unlimited operation and facing the wrath of commuters at congested terminals. Consultants were appointed, transaction documents moved between ministries, inter-ministerial groups were set up and finally an Empowered Group of Ministers (EGoM) was mandated with the task of making all this happen. This august body, after several deliberations, decided that the final documents would be modified after getting the opinion of the Planning Commi-ssion and the finance ministry, and being vetted by the ministry of law and then would be released to the pre-qualified bidders. By this time, two important applicants, Changi airport and Hochtief, had already walked out of the process, tired of the opacity, leaving in the field six potential developers. Technical bids of the applicants were submitted in September 2005, and then given to the selected consultants for evaluation.

The evaluation report of the consultants found only two of the bidders as qualified, and the end of November found that at the end of this process, there were only two technically qualified bidders for the two airports and the price bids for only these two were eligible to be opened. It must be remembered that the process of transaction documentation, selection of consultants, and terms of evaluation had all been agreed to at various levels of government, the finance ministry and Planning Commission, the ministry of law and the GoM.

The report of the consultants was considered by a Government Review Committee in the ministry of civil aviation, which felt that, though some of the evaluation criteria were subjective, the subjectivity did not reveal any apparent indication of bias or prejudice for, or against, any individual bidder. Meanwhile, a joint forum of AAI employees submitted an alternate plan for the development of the airports, and this was also considered by a review committee of the Airports Authority of India.

All these reports landed up on the table of the inter-ministerial group that met in early December. This group could not arrive at a recommendation in the face of some views expressed by participants questioning the entire process. The IMG report was considered by the GoM that referred it to yet another expert committee (including E Sreedharan of Delhi Metro). This committee, reportedly, has felt that only one of the bidders should qualify. And, therefore, back again to the GoM.

Several conclusions emerge. First, there is a noticeable reluctance to take decisions at all levels, including at the highest levels. This could either be because the decision of privatisation has itself not been fully owned up by those in charge, or because there is lack of professionalism in examining tenders and offers. Over the same period of time, the Singapore government has reached the final stages in the award of tenders for a much more sensitive activity?the establishment of casinos in that country. The approach was that all documentation and processes were decided a priori by government, and then the entire evaluation process became a hands-off process.

Second, processes can be derailed at several different stages even by individuals, again because there is no accountability of economic costs for these delays. Over the last 18 months, only 500 kilometres of national highways work has been tendered out, against over 3,500 kilometres in the corresponding period earlier?and no one is to blame for thousands of crores of economic activity lost. No one is accountable because no one is called to account.

Third, internationally, there is a very poor opinion of our decision-making processes. Whether it is progressing on the peaceful use of nuclear energy, or finding LNG for Dabhol, or in infrastructure creation, the lack of professionalism in decision-making is getting exposed. In each of these cases, separate ministries have separate views, and with change of individuals, the organisational approach changes. Lack of predictability of policy is considered to be one of the major hurdles of investment in India, and I would feel that the bureaucracy has to bear the burden of this opinion.

Finally, on the airports?can we get a decision please?it is impossible to jostle in the queues and in the sky for landing and take off. Surely citizens deserve better than this chaotic decision-making.

?The writer is a former finance secretary and economic advisor to the PM