INDIA. Employees of the Airports Authority of India (AAI) are planning strikes in protest against the bill to amend the AAI Act and allow private sector players to run the country’s major airports. This will temporarily ground plans of airport privatisation as well as the setting up of private sector airports at Bangalore and Hyderabad.
New investment and international expertise in the airport system is widely expected to boost the country’s tourism and has the support of the Confederation of Indian Industry (CII) and duty free operators.
AAI employees have accused the civil aviation ministry of trying to side-step the recommendations of a standing committee which looked into a previous amendment bill (which outlawed the original 100% leasing method). The ministry has since proposed that privatisation could be achieved either through a concession or management agreement with a private player or through a joint venture company. The law ministry also had objections to the original concession method.
The joint venture route which the government is now following (with AAI holding a minority stake) does not require an amendment to the Airports Authority of India Act 1994. Put simply, this bypasses the leasing route, which would have called for an amendment of the law. A comprehensive amendment bill has been passed – which labour unions are opposing – but precious time has been lost in the interim. Even now, the privatisation can only move forward after the bill clears other legislative hurdles.
The Indian ministry of civil aviation announced last October it was ready to move on a Cabinet proposal to privatise the country’s international airports. It is proposing the creation of joint venture airport companies with the Airports Authority of India (AAI) holding a 5% stake in each. The airports being privatised in the first round which begun last April are Mumbai, Chennai, Kolkata and Delhi.
What’s more, past AAI staff protests have proved to be tough nuts to crack. One, during the merger of International Airports Division (IAD) with National Airports Division (NAD) – to create AAI – is a notable example. AAI employs 22,000 people and bulk of them are based at the international airports chosen for privatisation.
Airport employees are to be moved to the new airport joint ventures, but, according to reports, most workers would not be willing to move voluntarily to the new companies. The Airports Authority Employees Union (AAEU) has called for demonstrations and rallies to stop all privatisation and leasing of airports. The union argues that the civil aviation ministry has not sought suggestions from employees, as recommended by the standing committee. The AAEU is also against the government’s proposed subsidies to the new airport companies, when, it says, such subsidies are not available to Airports Authority of India.
Several international airports including Frankfurt, Copenhagen, Unique Zurich airports, BAA, Hochtief AirPort, Malaysian Airports and Alterra Partners have shown interest in the privatisation in two roadshows held in Delhi and London last year.
Click here for earlier story on the airports privatisation.
