"Staff protest may ground Indian airport privatisation"

Monday, June 23, 2003

Staff protest may ground airport privatisation
India - The Economic Times


Employees of the Airports Authority of India are planning a major
agitation against the bill to amend the AAI Act and allow private sector
players to run airports. This will temporarily ground plans of airport
privatisation as well as setting up of private sector airports at
Bangalore and Hyderabad.

AAI employees have accused the civil aviation ministry of trying to
side-step the recommendations of a standing committee which looked into
the previous amendment bill that was withdrawn to pave way for the
modified version which has been passed by Lok Sabha and is waiting for
Rajya Sabha clearance.

Past AAI staff agitations have proved to be tough nuts to crack. The one
during the merger of International Airports Division (IAD) with National
Airports Division (NAD) to firm AAI or the infamous strike by air
traffic controllers (ATC) are notable examples. AAI employs 22,000
people and bulk of them are posted at the international airports which
have been chosen for privatisation. The employees will have to be
shifted to the joint ventures that will be formed for upgradation of the
Mumbai and Delhi airports. Hence officials feel that the stand of the
Airports Authority Employees' Union would spark off labour unrest.

As per internal assessments, most employees would not be willing to move
voluntarily to the proposed joint ventures. AAEU is trying to form a
coalition of all labour unions to strengthen their stand. The AAEU has
conveyed to the civil aviation ministry and the AAI its objections to
the AAI amendment Bill. A key accusation of the labour union is that the
civil aviation ministry was trying to obtain permission for leasing of
airports. This was rejected by a standing committee of MPs which looked
into the previous version of the AAI amendment Bill. As the previous
bill, which sought a mandate for leasing of airports, was withdrawn by
the government, the union holds that the same provision cannot come into
the revised Bill. Moreover, the government itself has given up the
leasing route, preferring joint ventures for attracting private sector
investment. Thus, the AAEU has called for demonstrations and rallies to
stop privatisation and leasing of airports.

The civil aviation ministry has not sought suggestions from employees as
recommended by the standing committee, the union has argued.

Setting up of private airports at Bangalore and Hyderabad would make
investments made by AAI at these cities redundant. The union feels such
a situation could lead to "structural imbalance and unhealthy
competition, ultimately sounding the death knell" for AAI.

It is understood that even senior officials are upset over the
government's plan to subsidise these airports following the plea of
private investors that these projects are not commercially viable. The
ministry has made a provision for such a subsidy through the amendment
bill. User fee would be levied to create a fund for subsidising these
airports but it is not clear which authority would collect the money and
how it will be routed to fund these projects. It is not fair to provide
such subsidies to private players while AAI has never been granted such
concessions, they feel.

With the government moving from corporatisation to leasing before
finally switching to the joint venture route, prospective investors are
feeling uneasy. The current threat of employees' agitation would only
add to the discomfort at a time when neither leasing nor setting up of
greenfield airports has failed to materialise. The government has also
been indecisive on the issue of amending the AAI Act, considering the
joint venture route at one stage to avoid the amendment which was facing
stiff opposition from the standing committee. A comprehensive amendment
Bill has been passed in the Lok Sabha now, but precious time has been
lost in the interim. Even now, the privatisation or leasing can move
forward only after the bill is cleared by the Rajya Sabha too.


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