Resisting privatisation

Print edition : February 24, 2006

CPI(M) Member of Parliament Dipankar Mukherjee at a rally of Airports Authority of India employees at the domestic terminal of the Indira Gandhi International Airport in New Delhi. - V.V. KRISHNAN

Airport employees across the country put up a valiant fight against the government's decision to award contracts to two private multinational consortia to "modernise" Mumbai and Delhi airports.

THE first "big ticket" privatisation move by the United Progressive Alliance (UPA) government - for the "modernisation" of the Mumbai and Delhi airports - landed it in the eye of a storm. Airport workers across the country hit back with telling effect. While the obvious possibility of imminent job losses explained readily their seething anger, the issues they have raised have a significant "public interest" aspect as well. The government's loss of credibility, in the face of persistent complaints that the tendering process was rigged, resulted in a groundswell of support for the employees belonging to the publicly owned Airports Authority of India (AAI) who plunged into a militant strike that lasted four days. The strike was called off on February 4 after Civil Aviation Minister Praful Patel gave a written assurance to the workers that a tripartite committee will examine the proposals to modernise the airports of the AAI. Dipankar Mukherjee, Communist Party of India (Marxist) Member of Parliament, said that the strike was "unprecedented". The biggest gain, was that the workers' insistence on their alternative plan, as opposed to the sale of assets, had been accepted, he said. The plans to privatise the other airports would not be easy to implement, he said.

On January 31, the government decided to award the contract for the "modernisation" of the Delhi airport to a consortium in which GMR was the main Indian partner. GMR, a group that has, since the onset of liberalisation, established itself as a key private player in the infrastructure business, partnered, among others, Fraport (the owner and operator of Frankfurt airport). The contract for the Mumbai airport project was awarded to a consortium in which the GVK Group partnered the Airport Company South Africa (ACSA). The two projects are expected to cost about Rs.5,400 crores.

The employees went on strike the day after the award of the contracts. One of the parties that lost the contract, Reliance Airport Developers Private Ltd., belonging to the Anil Ambani Group, has challenged in the Delhi High Court the award of the contracts to the two consortia.

Under pressure from the Left parties to reverse the decision, Prime Minister Manmohan Singh met the leaders of the airport workers' unions on February 3. The Prime Minister assured them that their jobs would be protected and requested them to call off the strike.

M.K. Ghoshal, convener of the All India AAI Employees' Joint Federation (AAIEJF), said that loss of jobs was not the main concern of the workers. "We are opposing the systematic unit-wise privatisation of the AAI as is being done by giving away profit-making Delhi and Mumbai airports," he said.

Manmohan Singh was reported to have told the workers' representatives that the government's decision could not be reversed. However, he agreed to constitute yet another committee to examine the alternative proposal prepared by the AAIEJF. The committee would comprise representatives from the Civil Aviation Ministry, the AAI management and its employees.

Praful Patel, who was present at the meeting said: "We want to engage with the employees on a continuous basis. We will also talk to the two companies to ensure that more employees are absorbed." He said both GMR-Fraport and GVK-South African Airports consortium have assured the government that 60 per cent of the employees at the two airports would be absorbed by them after the initial three-year period. The rest could go back to AAI.

KOLKATA, a bastion of the Left, was obviously the worst affected by the strike. The `Stop Work' declared by the 3,000-odd employees of the Netaji Subhas Chandra Bose Airport brought it to a standstill. The electronic signboards went dead, as did the public address system. With the electricity gone, the air-conditioners stopped working; water became scarce as the pumps stopped functioning; toilets became unusable. Baggage handling suffered and X-ray machines, conveyor belts and aero-bridges also stopped functioning.

M.K. Ghoshal, Convener of Airport Authority of India Joint Workers Forum.-V. SUDERSHAN

Addressing the striking workers, Amitava Nandi, a CPI(M) Member of Parliament representing Dum Dum said: "Like the NDA [National Democratic Alliance] government, the UPA government has also not learnt to read the writing on the wall, and if they do not learn soon, like the NDA government, they too shall go. This is no longer a trade union protest, it is a political one." He said: "I expect trade unions of all other sectors under the threat of privatisation, such as banks and the Life Insurance Corporation to come forward to express their solidarity with the AAI workers,", Nandi told Frontline.

Contrary to general opinion, the protesters were not callous. They repeatedly expressed their regret to the passengers. "I am sorry for the inconvenience faced by the passengers, but we are left with no other alternative," said Dipankar Ghosh, regional secretary of the AAI Employees Union. West Bengal Chief Minister Buddhadeb Bhattacharjee, addressing the National Executive Meeting of the Federation of Indian Commerce and Industries (FICCI) said: "I am sorry for the inconvenience caused to the passengers. The Central government should sit down with the unions for talks and resolve the matter soon."

In Mumbai, the protests by the 3,000 employees started as soon as the decision to award the contracts to private parties was announced. Employees picketed the departure gates of the domestic terminal denouncing the UPA government's policy to sell profit-making entities to private and international players.

The fear of retrenchment was palpable among the agitating employees. "The awarding of airport modernisation to private players is a decision that will impact almost every person in the AAI. This is why there is a huge show of support," said Nitin Jadhav, joint secretary of the AAI Employees Joint Forum. "We all know that when privatisation takes place the first thing they do is lay off people," he told Frontline.

By the second day, the support for the strike increased. The Mumbai airport might have come to a standstill had it not been for the Air Traffic Control (ATC) staff who said they supported the agitation but did not want to inconvenience passengers by stopping flights. The terminal, however, was in disarray. Power supply fluctuated; water was shut off, housekeeping, luggage handling, aerobridge services and conveyor belt operations had virtually stopped. Some of these operations had been handed to private contractors, so the airlines did not suffer much.

For a strike of this magnitude, this one seemed exceptionally well managed. Few flights were delayed. In fact, the strikers helped passengers find their way into the terminal as a door to the lounge had been blocked owing to the agitation.

On the second day, the police lathicharged the employees. One woman was severely injured and about 20 others were hurt. But this only provoked more people to join the strike. For instance, the Airport Fire Service (AFS), which had supported the strike initially without joining it, changed its mind. "It was unfair of the police to attack the crowd. Once we heard about this we could not sit and watch. So we came out and joined the agitation," said P.P. Kohli, the AFS chief.

Nitin Jadhav said the government has indiscriminately allowed private airlines to operate without developing airport infrastructure. "All this has been done with the hope that the private players will solve our infrastructure problems. But we know what has happened to sectors such as power, which have been privatised. It has been a huge failure and, more important, has done nothing for consumers."

"We are scared that our jobs will go. For some of us who have worked for 30 years it is too late to find new jobs if we are asked to leave," said Sayed Naseer, who works in the housekeeping department. "We saw what happened when Centaur Hotel was sold. So many jobs were lost." Another worker, Prema Joshi, said: "Privatisation means fewer jobs. It will be hard for older people to find work. Our families are still dependent on us."

The domestic terminal from where private airlines operate is undergoing massive renovation and modernisation at a cost of Rs.125 crores. It is unclear why the AAI started this when it knew that the airport will be privatised. "We began work because the airport needed serious repair work. We then decided we may as well completely renovate it," said Dilip Gujar, All-India assistant general secretary of the Airport Authority Employees Union. "Now they will take over this."

In Chennai, although flight operations were not affected, cargo movement suffered. Expressions of solidarity with the striking workers came from several sections of the working class. Bank and telecom workers unions, port workers, and State and Central government employees extended their support to the strike.

In Delhi, although the Air Traffic Controllers did not participate in the strike, karmacharis, and those handling the fire service, communication services, and airport support staff, participated actively. An effigy of Sonia Gandhi was burnt. The protests were impassioned but peaceful.

FROM the very beginning the tendering process was controversial. The selection of consultants was itself controversial. A consultant was alleged to have a conflict of interest because of a close business relationship with one of the bidders. These objections resulted in the government appointing a review committee to examine the consultants' assessment of the technical bids. The government then appointed an Empowered Group of Ministers (EGOM), headed by Defence Minister Pranab Mukherjee, which passed the buck to the Cabinet.

The objective of the whole privatisation exercise was to build and develop "world class airports". But what constitutes "world class"? Obviously, subjective criteria played a big role in evaluation. Also there were controversial allegations that the weightage to the different parameters in the evaluation process was assigned after the bids were opened - an unacceptable practice because it would make a mockery of the process of assessing competitive bids objectively.

Civil Aviation Minister Praful Patel.-V. SUDERSHAN

The government was forced to pass the burden of judging the winner to yet another committee, the Group of Eminent Technical Experts (GETE), which was headed by E. Sreedharan, the Managing Director of the Delhi Metro Rail Corporation. The committee's conclusions were damning.

On January 9, a Committee of Secretaries discussed the GETE's assessment of the bids. Sreedharan himself made a presentation to the committee. The minutes of the meeting, a copy of which is available with Frontline, indicate the extent of bungling in the whole process. Sreedharan pointed out that "there were certain flaws in the technical evaluation process which had to be corrected to make the evaluation more rational". He also observed that the distribution of weights was "neither approved by any competent authority nor kept in a sealed cover once assigned to prevent midway alterations". There was also "clear indications that a liberal attitude had been shown to bidder `E'" (Reliance). The committee's reassessment resulted in only one bidder (GMR) emerging above the cut-off mark of 80 per cent.

But there was more controversy in store. While announcing the winners, Praful Patel explained that since GMR's was the only qualifying bid it was asked to choose the airport it wanted after matching Reliance's revenue share bid of 45.99 per cent. In effect, instead of the government exercising its choice in terms of a competitive offer, the private contractor was allowed to make the choice.

On January 27, in a letter to the Prime Minister, CPI(M) MP Dipankar Mukherjee, pointed out that two of the consultants met the EGOM before the final evaluation of bids and that the consultants had been appointed to advise the AAI and not the EGOM. He also said that Praful Patel had shown "overenthusiasm and overt interest in the bidding process". He complained that this haste resulted in "throwing canons of tendering norms to the wind".

It is interesting that the media in general and the government describe the projects as part of a modernisation drive, not as one implying outright sale of public assets to a private party.

The Left parties have pointed out that major world class airports such as those in Singapore, Kuala Lumpur and Hong Kong have been built and maintained by publicly owned entities.

The Mumbai and Delhi airports generate about two-thirds of all revenues earned by the AAI. In fact, only 11, out of the 126 airports it manages, generate profits. This means that the AAI's ability to maintain and develop all the other airports will be seriously jeopardised by the privatisation move.

With inputs from Anupama Katakam in Mumbai, Suhrid Sankar Chattopadhyay in Kolkata and Aman Sethi in New Delhi.

This article is closed for comments.
Please Email the Editor