House panel view jolts private airport plans

Written by Shauvik Ghosh | New Delhi, Mar 5 | Updated: Mar 6 2008, 05:31am hrs
In what is being viewed as a major setback to new greenfield airports developed by private developers, just days ahead of the opening of the Rs 2,478-crore Hyderabad International airport project (in Shamshabad) and Rs 1,930-crore Bangalore International Airport (at Devanahalli), the Parliamentary Standing Committee on transport, tourism and culture has recommended that the existing airports (at Begumpet and HAL) in these cities stay open.

Both the new airports are expected to open for operations on March 15 and 30 respectively and the existing airports operated by the Airports Authority of India (AAI) will be closed simultaneously.

"The government still has time to renegotiate the issue with the concessionaire and can modify or scrap the clause which facilitates the closure of the existing airports," CPI(M) leader Sitaram Yechury, who heads the Committee, said. The possible revenue implications of such a renegotiation must not inhibit the government from proceeding on such a course in national interest, he added.

"The Committee strongly recommends unanimously and unequivocally to the government of India that the existing Hyderabad and Bangalore Airports should not be closed for commercial operations," the 131st report of the Committee, tabled in both Houses of Parliament, said.

Conceding that if the existing airports stay open, the new airports will face major revenue shortages, Kiran Kumar Grandhi, chairman-airports for GMR said The old airports being closed is part of the concession agreement we signed. We bagged the airport project through competitive bidding and since then have made huge investment in the project. We are engaging the government at different levels on the issue. We have to recover our cost and hence need the requisite projected traffic, he added. We have to see how they decide to divide the traffic between the two airports if both remain open, an official from the Tata Siemens consortium said.

We have an agreement signed with the government, the bid document as well as a Union Cabinet decision on our side and the government cannot do this, a high ranking official from GMR said. There have been some protests against the new airports which are being developed under the PPP model by private developers.