Infra Projects Grounded at Airport

With the privatisation move deferred for the third time, there is uncertainty over extension of contracts

Published: 30th May 2015 06:00 AM  |   Last Updated: 30th May 2015 12:31 AM   |  A+A-


CHENNAI: For the Chennai Airport, it appears that third time’s not the charm. With the airport’s privatisation bid being deferred for the third time in two years, a lot of uncertainty is prevailing amongst the airport staff — whether to go ahead with long-pending projects or hold back and wait as the new date to receive bids from private players like GVK, GMR and Tata is July 1. “There is a lot of confusion and people are in a dilemma about whether to extend contracts or ask people to continue working on a pro rata basis. But with no funding disbursed, development projects will not start and this is bound to affect the passengers,” said a senior official.

Several short-term contracts — for functions such as parking management, housekeeping, minor infrastructure and so on — have been awarded, but all of these will need renewal soon. “As there is no clarity on how long these contracts can be awarded, we are figuring out how to proceed,” said another official.

Beyond this, the new terminal has just completed two years of operations and is in dire need of some refurbishment — a task the Airports Authority of India (AAI) was hoping would be palmed off to the incoming private operator. “It’s not that we cannot do it, but we require funds. But no funds have been allotted due to all this confusion. We have made a representation for requisite funds, so that we can clear some of the projects that have been on hold for a while,” he added.

A major project that AAI officials here envisioned a while ago was the repurposing of the old Kamaraj and Anna Terminals to handle the increasing passenger capacity. “There is an idea to utilise the terminal space by closing entry gates and allowing people to enter through the new terminals and move into the old one. It will be like adding a lot of additional boarding gates and will greatly reduce the time taken for security and immigration,” said a top official, quickly adding, “Unfortunately, this will take a lot of money.”

Currently, the old terminals remain unused except for the space used by Travel Food Services (TFS) as their central kitchen, Spicejet’s new operations office and a few retiring rooms.

Every single time it appears as though the airport would be handed over to a private player, as envisaged by the previous government, the process is stalled at the bidding phase.

The last date set was May 26, but that was deferred a day before the bidding was set to happen — for reasons AAI is yet to make clear. An insider with the Key Infrastructure Development (KID) cell, AAI, indicated that there were second thoughts about the valuation of the airports, especially after the tussles they had faced with farming out Delhi and Hyderabad airports.

“The clauses are being worked out so that some of the issues linked to land usage rights and taxation are ironed out,” he said. A few of the eight firms interested in Chennai Airport have expressed their displeasure at this latest delay.

Buoyed by intermittent support from the judiciary and frequent delaying of privatisation attempts, the protesting unions are convinced that the deal will fail. “As we hoped, the government has postponed the privatisation bid again. We will continue to protest till they stop this process and run this airport on their own. I feel that even on July 1, nothing will happen,” said L George from the AAI Employees Union.

Turbulent Times

  •   August 2013: First invitation to bidders to show interest in operating and developing airports across the country, including Chennai and Kolkata
  •   November 2013: Plan deferred to January, following which outbursts from unions and a  from a Parliamentary Committee derailed the process
  •   October 2014: Modi government brings up privatisation of six airports again while drafting new Civil Aviation policy, quickly does a back-flip by December, saying this was merely a PPP model to run airports better
  •   January 2015: Bidding schedule posted and terms and conditions enlisted in Request for Qualification document. Interested parties meet  AAI and MoCA officials and are asked to submit bids by March 23
  •   March 2015: After private parties tour the airport and raise several queries, the bidding date was pushed by two months to May 26. Unions raise a furore against privatisation and Madras HC seeks a response from the Centre
  •   May 2015: A day before the bidding was scheduled to be held, AAI sents out a notice that the bidding process has been deferred to July 1 for operational purposes
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