India defers on privatisation of four airports

The Indian Government has decided not to go ahead with the privatisation of four of airports in Chennai, Kolkata, Jaipur and Ahmedabad.

The Airports Authority of India (AAI) will continue to control the Chennai and Kolkata airports while the maintenance and operations of the other two airports is likely to be contracted.

A senior official from the civil aviation ministry was quoted by Firstpost as saying: "Unlike other airports under AAI where private parties have been allowed, significant investment has already been made by the AAI in these four airports at about Rs50bn.

"Privatisation is usually done to attract investments but since significant money has already been invested in these projects, we have put the entire process on hold. Besides, there were some employee issues too."

In January, AAI invited bids from national and international firms for operating the airports under public private partnership (PPP), and eight companies including GMR Airports, GVK Group, Adani Ports and Special Economic Zone, Siemens Postal Parcel and Airport Logistics and International Business Development Flughafen Zurich expressed an interest.

The announcement of privatisation of the airport had resulted in a backlash from airport staff who feared that the move would result in a loss of their jobs.

The International Air Transport Association (IATA) has also opposed the move.

IATA Director-General Tony Tyler was quoted by Business Standard as saying: "My suggestion is the government should carry out a rigorous cost-benefit analysis before taking a decision on these four Airports Authority-run airports in Chennai, Kolkata Ahmedabad and Jaipur."

The AAI has spent Rs27bn ($412m) and Rs24bn ($366m) on upgrading the Kolkata and Chennai airports, respectively.