Aviation ministry on backfoot after Opposition questions Changi contract

The Congress and the Left parties have created an uproar over an initial MoU between India and Singapore which allows that country to nominate an agency for taking the O&M contract for the two Indian airports for a fee.

Sindhu Bhattacharya December 30, 2015 21:27:26 IST
Aviation ministry on backfoot after Opposition questions Changi contract

New Delhi: So is it wrong to say that the Indian government has agreed to let Singapore's Changi airport operate and manage Jaipur and Ahmedabad airports? Under intense Opposition fire for bypassing the tender route to award O&M contract for these two airports directly to a Singapore entity through a government-to-government (G2G) agreement, the Ministry of Civil Aviation was on fire fighting mode today.

Aviation ministry on backfoot after Opposition questions Changi contract

Representational image. AFP

Secretary RN Choubey said "it is possible that Changi decides that the procurement of some services at the two airports should be done via a tender. Let the team come and more details will emerge".

The Congress and the Left parties have created an uproar over an initial MoU between India and Singapore which allows that country to nominate an agency for taking the O&M contract for the two Indian airports for a fee. Till now, any private participation in airport modernisation has always been done through a global tender where the Airports Authority of India invites bids.

Despite the disclaimer by Choubey, it is possible that the O&M contract for these two airports sees no bidding at all. Changi has demonstrable expertise in airport management and the two Indian airports it will Associate with were earlier going to be privatised through the PPP mode. This would have meant private parties could pick up equity stakes in the Airports and taken them on long lease, working out some sort of revenue sharing arrangement with AAI.

The Singapore Government has nominated Changi airport as the airport operator from its side to take up the operation and management of Jaipur and Ahmedabad airports along with the Airports Authority of India, R.K. Srivastava, Chairman AAI confirmed today.

The G2G agreement was signed on 24 November during Prime Minister Narendra Modi’s visit to Singapore and will see Changi manage the retail space inside the terminal buildings and the car parking spaces, a senior AAI official said. The operations of the airports will remain with AAI and another official clarified that there is no scope of Changi picking up any stake in the airports. "They may at best charge a success fee, over and above the fee for O&M expertise but there is no question of AAI diluting any stake in either airport in favour of Changi," this official said.

Srivastava said the Changi team is expected to visit the two airports sometime in January. Thereafter there will be fresh negotiations on the terms of an O&M contract. "Before we could decide on what the terms and conditions can be for the two parties to work together the Singapore government had to nominate a party from its side. Now this has happened and everything else will follow,” Srivastava said.

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