The Hindu Business Line : Airport leasing: Contract to KPMG may be cancelled

THE Government may terminate the contract of the global advisors, KPMG, which has undertaken the work on leasing of the four metro airports at Delhi, Mumbai, Kolkata and Chennai.

Official sources told Business Line that with procedural problems plaguing the leasing of the four airports, the Government may decide to terminate the contract of KPMG rather than incur huge costs. A final decision on the matter is expected shortly, sources indicated.

"The consultants have been meeting the deadline. However, with strict laid-down procedures in the Government, it becomes difficult to send the reports back to the consultants in time. In the given circumstances, it may be more prudent to call off the exercise," sources said.

The Government is said to have already paid the consultants about Rs 3 crore. The process to attract potential bidders for the airports started in Delhi in April last year and was followed with a road show in London in the same month. The Government also recently called for Expression of Interest from leading companies to participate in the restructuring of the metro airports.

Besides, to expedite the leasing of airports, the Government has already introduced the Airports Amendment Bill, 2003. The Bill has already received the nod from the Lok Sabha and is expected to be taken up by the Rajya Sabha during the next session. However, despite these moves, there is uncertainty as to when the entire exercise will be completed.

Meanwhile, work on short-listing technical and financial consultants for leasing of smaller airports in non-metro cities is on in full swing. Official sources indicated that within a month the Government should be in a position to list both technical and financial consultants for leasing of the non-metro airports.

The Government is likely to specify that the development of airside would vest with AAI and the private partners will be allowed to develop the city side of the airport.

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