When it first decided to change the face of airports in early 2000, the then BJP Government called it an exercise in ‘privatisation’.
It held roadshows seeking potential investors for doing up Delhi, Mumbai, Kolkata and Chennai airports.
In an attempt to be different, the UPA-I Government changed track and called it the ‘modernisation’ of airports. While the BJP Government wanted to form joint ventures for four metro airports in Delhi, Mumbai, Chennai and Kolkata rather than giving the assets on long-term lease, the UPA Government decided to go in for the latter plan.
Hence, it gave Delhi and Mumbai airports on a 30-year lease extendable by another 30 years to private parties.
Initial hiccups
After the initial hiccups and countrywide protests from employees of the Airports Authority of India (AAI), which had been operating and running these airports, and also the Left Parties, a consortium headed by the Bangalore-based GMR Group bagged the contract for modernising Delhi airport while a consortium headed by the GVK Group won the right to modernise Mumbai airports.
When the bidding process started the Government received six bids from industrial houses interested in participating in the restructuring of Mumbai airport and five for Delhi airport.
Before the GMR and GVK consortiums won the bids for modernising the two airports, the job of looking after all the airports in the country was with AAI, a body constituted by an Act of Parliament. AAI came into being on April 1, 1995 by merging the National Airports Authority and the International Airports Authority of India.
The merger resulted in a single organisation entrusted with the responsibility of creating, upgrading, maintaining and managing civil aviation infrastructure both on the ground and in the air space in the country.
Privatisation of Delhi and Mumbai airports meant that the AAI’s role in running these two airports was reduced dramatically.
The modernised Delhi airport was inaugurated by Prime Minister Manmohan Singh in July 2010. Thanks to this exercise in modernisation, India finally had integrated airport terminals — where domestic and international operations of airlines are from one building.
Delhi’s Terminal 3 (T-3) was touted as the best thing to have happened in the aviation sector in India, particularly as the airport opened in time for the 2010 Commonwealth Games being hosted by India.
With a capacity to handle 34 million passengers annually, T-3 is bigger than Heathrow's T-5 (25 million) and Singapore’s Changi T-3 (22 million).
T-3 is also one of the largest structures ever constructed in the country.
India’s first attempt at modernising airports seemed to bear fruit as between 2006-10 and 2012, AAI earned over Rs 5,100 crore as revenue share from these two airports.
The process of modernising Delhi and Mumbai airports was not without its share of controversies though.
The worst fears of those against privatisation came true when Delhi airport raised charges by over 300 per cent and also imposed an arrival and departure fee on travellers.
The manner in which the Government went about the process of modernising Delhi airport was also red flagged by the Comptroller and Auditor General.
The creation of these airports had also raised hopes that India will finally stand a chance of becoming a hub for airlines and take the battle back to Singapore, Dubai, Abu Dhabi and a host of other cities in the region which have their own hubs.
The fact that this has not happened speaks of the inherent cost pressures under which the Indian aviation sector operates.
Public-pvt partnership
The process of modernising airports did not stop with Delhi and Mumbai as those in Kochi and Nagpur too were privatised.
The Government has also started the process of modernising more airports like those in Chennai and Kolkata through the public-private partnership route.
Most recently, the Ministry has started working towards awarding operate, maintain and transfer contracts for airports including those at Lucknow, Ahmedabad, Jaipur and Guwahati by March 31, 2014.
In addition to Navi Mumbai airport, the Ministry of Civil Aviation will make efforts to move ahead on Goa (Mopa) airport as well.