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In the midst of the Left parties raising questions over the move to privatise Delhi and Mumbai airports, the Civil Aviation Ministry on Saturday said the move was meant to enhance the public-private partnership in modernising the airports and not to 'selloff' the assets.
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However, the decision to put a 49 per cent FDI cap on modernisation and restructuring of Delhi and Mumbai airports, which was pruned from 74 per cent, was not likely to be changed, highly-placed ministry sources said in New Delhi.
Asked about the urgency of Civil Aviation Minister Praful Patel's announcement regarding the FDI cap, the sources explained that it was prompted by the fact that the last date for submission of Expression of Interest on June 2 had approached and the process of receiving EoIs would have been invalidated had the announcement not been made. The date has now been extended to July 20.
The Left parties have been opposing the sale of assets like land and infrastructure in the two airports, which generate a major chunk of revenue for the Airports Authority of India. The AAI has been generating profits on a regular basis and had recorded Rs 505 crore (Rs 5.05 billion) gross and a net profit of Rs 288 crore (Rs 2.88 billion) last fiscal.
The sources said the privatisation move did not amount to sale of assets of the airports as these would be given on lease to the new management of the proposed joint ventures to be set up later for the two airports.
They made it clear that the proposed joint venture company would lease assets from the AAI, which would be a source of income for the PSU. About half of the revenues come from air traffic control, which would remain under government control, as also the security paraphernalia.
Keeping in mind the Common Minimum Programme and the demand raised by the Left parties, the sources said the ministry would definitely address the problems of workers and take a decision only after consultations with them and the management.
Announcing the slashing of FDI-private sector cap from 74 per cent to 49 per cent, Patel had said a special purpose vehicle would be set up as proposed in the past with 26 per cent equity by AAI. The government has decided that minimum 51 per cent of equity should remain in Indian hands.
On September 11 last year, the NDA government had approved a proposal under which private investment, including FDI, could go up to 74 per cent in a joint venture for airport modernisation in Mumbai and Delhi.
The sources said the latest move was in line with the CMP which talked about bringing in greater public-private partnership, which would be further enhanced.
Meanwhile, Patel is continuing discussions with Left party leaders on the matter, including CPI General Secretary A B Bardhan and CPI(M) leader Sitaram Yechury.
Asked whether the Union Cabinet would have to clear the proposals announced by the minister, the sources said there was a feeling that the Cabinet would have to vet the proposal.
However, a section of officials in the ministry said this was not required as it involved "procedural" issues which were left to the ministry for a decision.
This section, the sources said, felt that in any case, the key ministries, including finance and commerce as well as the Prime Minister's Office, were being kept abreast of the developments.
