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Airport privatisation: AAI, infra firms talk Chennai project amid picket, cargo-handling pause

Unions request Subramanian Swami to file PIL against Govt's move; may also meet Jayalalithaa

T E Narasimhan Gireesh Babu & Sharmishta Mukherjee  |  Chennai/New Delhi 

Six companies, including the GMR, GVK and Tata groups, have shown interest in taking over Chennai airport's management control. A preliminary closed-door meeting was held at Chennai on Tuesday, against the backdrop of a protest by Airports Authority of India (AAI) employees against the move.

The staff unions have approached Bharatiya Janata Party leader Subramanian Swamy and requested him to file a public interest suit against the government's move. They also plan to meet Chief Minister J Jayalalithaa, requesting her to broker a settlement similar to the decision it took on the Neyveli Lignite Corporation divestment issue.

According to sources, officials from six arrived at Chennai Airport on Tuesday morning, for a meeting with AAI officials on relevant factors, including the development possibilities, the potential for revenue generation and possible requirements for additional investment.

The that came to Chennai include GMR, GVK, Fraport, Reliance, according to sources.

Around 400 employees from the Airport Authority Employees Union (AAEU) conducted a demonstration at 8 am, restricting the company representatives from entering. Later in the day, the officials met in a nearby hotel, according to sources. Due to the protests, cargo handling from the airport has come to a halt. Around 300 tonnes were stuck, both export and import. The firms in question included a Turkey-based company and a Germany-based transport company.

Sources said the Tata Group was expected to form a consortium with the Singapore Airport Authority for bidding. When asked, a Tata Sons spokersperson responded, "Tata Reality and Infrastructure Ltd is in the infrastructure space. They have taken the RFQ (Request For Proposal) document and are studying it. It is premature to comment anything more." GMR has declined to comment on the protests, since it is at the RFQ stage and the issue is between the government and the unions. On a query related to the companies’ visit, Airport Director H S Suresh said a statement would be issued soon.

Ministry sources said the unions had expressed concern on whether all employees would be absorbed by the private concessionaire.The government has said no jobs will be lost due to privatisation.

The Government of India, which has plans to privatise six airports in the country, recently started procedures to invite bids from private firms for managing the Chennai and Lucknow airports. Infrastructure Leasing & Finance Services (IL&FS), Essar Infrastructure, Tata Projects, Tata Realty and Infrastructure, GMR Group, Reliance ADAG, Sahara, GVK, Fraport AG and Essel are among those which have evinced interest in bidding.

The employees union, which has been protesting against the move for some time, said AAI had recently completed two new terminals with a total investment of around Rs 2,400 crore. Privatising at this point of time would increase the user development fee and airport development fee for customers.

Earlier, AAI has launched a new domestic and international terminal with an investment of Rs 2015 crore. It was expecting the period for payback to be nearly 10 years.

The new domestic terminal has a capacity for 10 million passengers; it is four mn for the international one. The combined area of the new terminals is 133,462 sq mts. The handling capacity in the domestic terminal was expected to go up to 16 mn and the international terminal to seven mn per annum, with the new terminals.

The government will request the central government to suspend such payment on loans from nationalised banks for a similar period.

Affected citizens are to each get 15 kg of wheat flour, 15 kg of rice, five kg of pulses, three kg sugar and some other things free of cost. The state is to take full reposibility for the upbringing, including schooling, of orphaned children. For the areas in the plains, there will be 50 per cent more compensation for damage to the sugarcane crop.

First Published: Wed, October 09 2013. 00:12 IST
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