Questions over drafting of concession agreement hold up the process

Uncertainty gripped privatisation of six major airports, including those of Chennai and Kolkata, as the bidding has been deferred again, till the middle of March.

This is the third time the process has been postponed midway, putting a question mark over the exercise, which started in November last.

Sources in the Civil Aviation Ministry said the process was hit by questions over the drafting of the concession agreement, which would have to be signed by the selected private company, the Airports Authority of India (AAI) and the Ministry.

The due date for the Request for Qualification had earlier been pushed from January-end to February 17 for the Chennai, Kolkata, Lucknow and Guwahati airports, and to February 12 for Jaipur and Ahmedabad. These dates have been pushed further to March 17. Now, it seems the bids will be opened only after the general election as the model code of conduct is likely to come into force by early March.

In a major policy shift in September last, the government invited applications from the private sector. But in November, the process was postponed by two months.

Several foreign infrastructure companies such as IL&FS Transportation Networks, Essar Projects India, Cochin International Ltd., Essel Infraprojects Ltd., GVK, Fraport, Saudi Arabia, GMR Airports Ltd., Sahara Group and Turkish firm Celebi Habacilik Holding AS have evinced interest in the project.

The modernisation of the Kolkata and Chennai airports had cost the AAI Rs. 2,325 crore and Rs. 2,015 crore. The move has come under severe criticism from several quarters, including AAI employees, trade unions, political parties, airlines and the International Air Transport Association.

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