Days before its meeting with the parliamentary standing committee on civil aviation, the Planning Commission, in a project appraisal letter to thefinance ministry, has backed the Airport Authority of India?s (AAI) proposal for the modernisation of the Kolkata airport but reiterated its stand, including a review of the size of the new terminal.
In its appraisal letter to the secretary, expenditure, ministry of finance, who is also the chairman of the public investment board (PIB), just ahead of the meeting with the parliamentary panel on May 22, the commission has stated that it does not have any objections to the AAI?s plan for the modernisation and expansion of the Kolkata airport.
It is, however, stuck to its earlier demands. A senior official involved in the process told FE that the commission wants AAI to undertake the modernisation work in two phases and take a re-look at the issue of peak-hour traffic and construction of a terminal to handle 20 million passengers by 2016.
?We have said that we support the proposal but we want the AAI to look into the transportation issue. At present, the airport is not connected by metro rail. The AAI should ensure that as part of the modernisation process, the metro is be extended to connect the airport,? the official said.
The parliamentary panel intervened in the issue following a spat between the commission and civil aviation minister Praful Patel who alleged that the Kolkata modernisation project was delayed due to constant objections raised by the commission.
?The commission is more eager to put most of the modernisation projects on the PPP mode. They have not realised the mess they have created out of privatising the Delhi and Mumbai airports. They will be happy if we put the Kolkata and Chennai airports also on the PPP mode,? a senior Parliamentarian on the committee had said earlier.
Under pressure from the Left parties, the UPA government had to go back on its words and settle for the AAI modernising the Kolkata and Chennai airports instead of the government?s preference for taking up the projects under the PPP route.
Peeved over the delay in clearing the modernisation and expansion works at the Kolkata and Chennai airports and the mess that has been created of the privatisation of Delhi and Mumbai airports, the parliamentary panel headed by CPI-M Politburo member Sitaram Yechury had summoned both the Planning Commission and the civil aviation ministry to explain their stands on the issue.
The Planning Commission, in a meeting of the inter-ministerial group on modernisation of the Kolkata airport had suggested a modular approach for terminal expansion in two phases and said the project seemed ?over-ambitious? and would lead to unviable investment.
It also said the AAI?s proposal for a secondary runway at a cost of Rs 35 crore and another Rs 290 crore for construction of ATC towers and upgradation of a railway structure did not look feasible.
The commission also felt that construction of a new terminal building of 1,80,000 sq metre at the Kolkata airport to handle 24.56 million passengers by 2016 is much too big a space as till 2016 most of the space would lie unused. The airport handled 6 million passengers in 2006-07.
On the finances side, the commission pointed that the Kolkata airport had an operating surplus of Rs 33.40 crore in 2006-07. Its ability to absorb and service an investment of about Rs 2,000 crore ?is very doubtful?. This would imply an inevitable increase in user charges.
?This modular approach is generally favoured in order to improve the viability of investments, as it would postpone a capital expenditure of about Rs 800 crore,? the commission argued.