Partners for plunder

In another case of handing over national assets to private operators, the Central government invites joint-venture partners under the PPP model to manage the Kolkata, Chennai and a few other airports, built by the AAI at huge costs.

A view of the new domestic terminal at the Chennai Airport.

FOR 63-year-old Ram Arya, the career move from a secure government job to a contractual position in a private company held the promise of higher pay and social security benefits. Three years after retiring as a senior coordinator with the Delhi International Airport, run by GMR Infrastructure since 2006, Arya laments that the promises have remained just on paper. After the privatisation of the Delhi airport in 2006, Arya had the option of remaining an employee of the Airports Authority of India (AAI) or joining GMR. However, it was not an easy choice either way, as remaining with the AAI would entail taking a transfer to a new city. Arya had worked in Delhi all his life and was not willing to shift to a new city at the fag end of his career, when he was only three years away from retirement. He chose to stay on in Delhi and take up the GMR offer with a promise of 30 per cent increment and with the same benefits as the government job. Arya retired in July 2009. He has not received a pension to date.

Following the privatisation of the Delhi airport in 2006, AAI employees had to choose between a transfer to a new city in the existing government job and contractual employment with a private company. It was a difficult choice for most of them. In fact, some of the employees’ concerns have not been sorted out to date. In a lawsuit filed in the Delhi High Court in 2008, the Airports Authority of India Employees Union (AAIEU) challenged several clauses of the Operations, Management and Development Agreement (OMDA) as being discriminatory to the cause of workers. The case is still pending, with the next hearing slated for August 26.

Even as the concerns of employees of airports that have been privatised remain unaddressed and the AAI has spent substantial amounts of money to develop other metro and non-metro airports, the United Progressive Alliance (UPA) government is going ahead with an aggressive agenda for the privatisation of airports. On July 4, the government gave its nod for the privatisation of the Kolkata and Chennai airports by bringing in a joint-venture partner to manage the operations at these airports, on the lines of the public-private partnership (PPP) model in Delhi and Mumbai. As of now, the other airports lined up for privatisation are Lucknow, Guwahati, Jaipur and Ahmedabad. The Planning Commission will decide the modalities of privatising Kolkata and Chennai airports. However, the approval of the respective State governments will be required to go ahead with the PPP.

Interestingly, the AAI has invested Rs.2,325 crore and Rs.2,015 crore in developing the Kolkata and Chennai airports respectively. The move to privatise these profit-making airports, as also other non-metro airports, is the latest in a series of government decisions since 2006 to engage the AAI in airport development projects while at the same time limit its role in operations so as to give undue benefits to private players. The pace of privatisation, as evinced by the large-scale transfer of employees of the Delhi airport, also has significant social costs, with AAI employees staring at an uncertain future. Speaking to the media on July 4, Civil Aviation Minister Ajit Singh stated that AAI employees would not lose their jobs. Given the unresolved issues relating to employees following the privatisation of the Delhi and Mumbai airports, the unions have raised doubts about the sincerity of the government’s commitments.

Bias against AAI Also, the policy of engaging the AAI in the development of the airports and then inviting bids from private operators to take over operations in itself demonstrates a bias against the AAI.

The aggressive emphasis on rapid privatisation of airports goes against the recommendations of the tripartite committee constituted in 2006, consisting of representatives of the Ministry of Civil Aviation, the AAI and the AAI Employees Joint Forum. The committee had recognised that the AAI was engaged in the modernisation and development of approximately 60 airports, including non-metro airports and the mega projects in Chennai and Kolkata. The committee had suggested that commercial, operations and maintenance activities of all of these airports should be undertaken by the AAI.

The report also takes up the issue of job security and absorption of employees following the privatisation at the Delhi and Mumbai airports. The report states: “The Committee recommends that AAI should make best efforts to adjust the employees returning from IGI [Indira Gandhi International] and CSI [Chhatrapati Shivaji International] airports at other establishments at Delhi and Mumbai to the extent possible.”

In July 2009, the UPA government accepted the recommendations of this tripartite committee. The present move towards large-scale privatisation is thus a reversal of the policy decision on the mandated role of the AAI in modernising and developing airports.

The move to invite private parties as joint-venture partners for the Chennai and Kolkata airports is particularly unjust as the AAI has made huge capital investments in developing these airports. The rationale for privatisation is not clear, especially after the AAI has itself carried out infrastructure development at both the airports.

Speaking to Frontline , Balraj Singh Ahlawat, general secretary of the AAIEU, said: “When the AAI has successfully built an airport, why can’t it be entrusted with the responsibility of operating it? Privatising airports built by the AAI is tantamount to handing over national assets to private parties. Also, the job security of 2,300 employees working in both Kolkata and Chennai will be jeopardised. The problems of about 400 employees working in the Delhi and Mumbai airports have not been resolved as yet.”

In a statement criticising the privatisation move, Tapan Sen, general secretary of the Centre of Indian Trade Unions (CITU), noted: “Handing over the management of and control of these airports to private hands, both domestic and foreign, leaving government-owned Airports Authority only to earn rent/revenue, is tantamount to transferring huge public assets virtually free of cost to private hands.”

The implementation of the PPP model in the aviation sector in the case of the Delhi and Mumbai airports has led to a substantial increase in airfares and therefore gone against the larger public interest. An earlier article in the July 27, 2012, issue of Frontline took detailed note of the exorbitant increase in tariffs as a result of the privatisation of the Delhi airport and the undue benefits accruing to GMR.

Subsequently, the Comptroller and Auditor General (CAG), in a report in August 2012, slammed GMR over the delay in the payment of retirement dues to AAI employees who did not wish to work with the Delhi International Airport Private Limited (DIAL). Thus, the implementation of the PPP model so far has favoured the private operators to the detriment of the public at large as also the workers of the public sector company.

The present move towards privatisation has also triggered a political battle between the Centre and the States. On July 10, West Bengal Chief Minister Mamata Banerjee said that she was strongly opposed to the move to privatise the Kolkata and Chennai airports. She said that she would initiate talks with Tamil Nadu Chief Minister Jayalalithaa in this regard.

The move has also seen trade unions across the political spectrum getting united. The CITU and the Indian National Trinamool Trade Union Congress (INTTUC, affiliated to the Trinamool Congress) have come together to float the Airport Authority Officers’ and Employees’ Joint Forum to protest against the Centre’s decision.

The association and the unions of the AAI, in a statement issued after a joint meeting on June 28, stated: “This meeting resolves to jointly oppose privatisation whether in the name of PPP, modernisation or restructuring.” The forum, now headed by Trinamool Congress MP Saugata Roy, is chalking out a countrywide agitation to oppose the privatisation move.