The Telegraph
Since 1st March, 1999
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Airport FDI plan goes into tailspin

New Delhi, June 6: Civil aviation minister Praful Patel may come up against a wall of resistance from within his own cabinet even as he seeks to push through plans to sell up to 49 per cent of Delhi and Mumbai airports.

Patel can, however, relax on another front. The Left, which has been blowing hot and cold over his airport privatisation plans, will not take the issue to any breaking point, nor even raise it in Parliament.

Left sources said they are extremely piqued by his remarks that the Communists had agreed to plans for airport privatisation. Perhaps, even this level of discomfort would not have been forced on the Nationalist Congress Party minister if he had been more reticent.

CPM MP Nilotpal Basu told The Telegraph, “We will continue to ask him two questions — doesn’t his move tantamount to privatising the two airports (even though technically the land and assets are being merely leased out) and couldn’t he have leveraged the Rs 2,000-crore reserves with Airports Authority to fund modernisation of Delhi and Mumbai airports .... (however) we will not take the issue to Parliament.”

Before Patel announced the airport plans, he had met most top leaders of the CPI and CPM, including Sitaram Yechury and A. B. Bardhan, and the two parties, some say, appear to have had decided to turn a Nelson’s eye on his plans as long as worker interests were being protected. However, the labour unions of both the parties had, at the same time, decided to continue protesting the decision. AITUC chief Gurudas Dasgupta had protested the privatisation bid and said, “There are security issues attached to foreign control.”

But the big trouble for Patel is rules demand that ministers refer back to the cabinet any decision which goes against the ones taken earlier. Although the civil aviation ministry has taken the plea that they are working within the framework of an earlier cabinet decision and were merely balancing certain investment levels, doubts exist on whether their plea is acceptable.

The Union cabinet, headed by former Prime Minister Atal Bihari Vajpayee, had in September last year decided not to set any limits on foreign direct investments within the 74 per cent to be offered to private investors in the two mega Indian airports.

Officials said normally rules demand that any deviation from this decision, even by another government at a later date, has to be cleared by the cabinet. “Only the cabinet can undo what another cabinet has decided ... no group of ministers or empowered committees can change it ... if there are any confusions, the law ministry will be asked to rule whether the civil aviation ministry has to come to the cabinet for another clearance.”

Even when the earlier liberal FDI policy for airports was cleared by the cabinet, several ministries had its own objections. Though the government has changed, the permanent bureaucracy has not. Therefore, the same objections are likely to crop up if the issue comes up before the cabinet.

Although air traffic control and policing will remain within the government’s purview, officials point out that the kind of access a foreign power will enjoy will be “enormous” if a transnational loyal to it controls most facilities at a major Indian airport. And this has always been objected to by the Intelligence Bureau and the defence ministry.

Besides, the Planning Commission has always insisted that the civil aviation policy should be cleared first by the cabinet before the government starts taking policy decisions on investments to be allowed in airports or airlines.

If these ministries continue with their line of thinking, Patel may well find that his dream of swanky new airports run by consortiums of private entrepreneurs being delayed beyond what he bargained for.

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