By IPS Correspondents
NEW DELHI, Jan 3 2006 (IPS)

Plans to partly privatise India’s two largest international airports – one serving the national capital and the other the commercial hub of Mumbai – may get grounded as a result of persistent charges of rigged bidding.

Both airports are notorious for their poor passenger amenities, congested operating conditions and palpable need for modernisation to cope with the demands of a long-closed economy that is now rapidly integrating with the rest of the world.

Even as dense winter fog in Delhi keeps airline schedules disrupted, the civil aviation ministry has been accused of opaqueness and manipulating the bidding process in favour of two international consortia – GMR-Fraport, Frankfurt and Reliance-ASA, Mexico.

After private consultants, appointed by the civil aviation ministry recommended the two consortia (and their Indian partners) be awarded the contracts, worth more than three billion US dollars, there was an uproar that the bidding was not competitive.

While representatives of the consortia concerned denied any manipulation, several government officials involved in the complicated bidding mechanism have alleged that the process has not been fair.

Gajendra Haldea, adviser to the Planning Commission, has stated: “Unfortunately, the bidding process has failed to attract or pre-qualify any of (the) à operators” of the best airports in the world, such as Hong Kong, Singapore, Seoul, Kansai, Dubai and Kuala Lumpur.

Haldea added that it was doubtful if the partners chosen by the short-listed Indian bidders would enable the country’s two airports “to achieve world/Asian standards through airport operators who seem to be performing inadequatelyà”

Although the question of modernising airports has been on the anvil for many years, it was only a year ago that the Indian government decided to opt for a public-private partnership scheme for the award of long-term (up to 60 years) concessions to run Delhi and Mumbai airports.

And that happened after a government report on the state of the country’s international airports described it as ‘’an embarassment” and said the entire civil aviation industry was ‘’in crisis”.

Both Mumbai and Delhi handle twice as many take-offs and landings as they were originally designed for, resulting in long queues at immigration counters for passengers who do not carry diplomatic passports.

There is negligible duty-free shopping and passengers may not park their cars overnight outside, resulting in chaotic conditions and bewilderingly large crowds outside the terminals.

Maintenance is unspeakable. Five years ago, a young girl died and several other passengers were injured when a faulty escalator at Delhi airport’s arrival hall yawned up and entangled the riders in heavy machinery.

It was finally decided that if Delhi and Mumbai were successfully modernised with the help of private partners, similar schemes would be implemented for other international airports at Kolkata, Chennai and Bangalore.

The first flaw in the bidding process was an attempt to hand over large tracts of expensive urban land and real estate to the bidders. This anomaly was quickly rectified after a public outcry.

By the middle of September last year, eight consortia had been pre-qualified for submitting technical bids but, soon afterwards, allegations of irregularities began to surface.

Representatives of the communist parties – on whose support the ruling, Congress-party led United Progressive Alliance (UPA) coalition government in New Delhi is dependent for its survival – called for a cancellation of the bidding process and the calling of fresh tenders.

On Dec. 15, parliamentarians belonging to the Left parties and the regional Samajwadi Party walked out of the Lok Sabha (or law-making, lower house of parliament) after their demand that the entire bidding process be scrapped immediately was not accepted by the government.

While civil aviation minister Praful Patel claimed that the bidding process was fair, two leftist legislators – Nilotpal Basu of the Communist Party of India-Marxist (CPI-M) and Abani Roy of the Revolutionary Socialist Party (RSP) – wrote to UPA chairwoman Sonia Gandhi complaining of “large-scale irregularities” in the bidding process.

Basu suggested that the government could ‘’save face if the bidding process is scrapped.”

The communists demand that the government allow the public sector Airports Authority of India (AAI) to select its own joint-venture partners from any country in the world for the modernisation of the airports.

Certain unions of employees and associations of officers of the AAI had mooted such a proposal in 2003, a note prepared for the union cabinet has pointed out.

As charges of irregularities flew, evaluation reports submitted by the two private consultants have been referred to by no less than four separate official committees comprising civil servants and politicians.

Whereas attorney general Milon Banerjee, a political appointee of the government, has stated that the bidding process was above board, there have been dissenting voices from within the bureaucracy.

Newspapers and websites have published detailed stories and written editorials about different aspects of the controversy relating to a major initiative to privatise India’s large and inefficiently-run public sector.

It has been claimed that the consultants were subjective in their evaluation of the bidders. The consultants, in turn, argue that the very nature of the bidding process was such that an element of subjectivity in judging the capability of the bidders could not be avoided altogether.

Left parliamentarians have alleged that the consultants have close business links with the bidders. The consultants argue that there was no “conflict of interest” since they were appointed before the identities of the bidders became known.

An “empowered group of ministers” headed by defence minister Pranab Mukherjee decided to steer clear of the controversy by referring the contentious issues to a panel of top bureaucrats.

But, a week before the report was due on Jan. 10, AAI’s chairman K. Ramalingam and its finance secretary Prasad Rao have distanced themselves from the evaluation and, in a note to the ministry, called for ‘’fresh technical and financial bids from the eight pre-qualified bidders.”

Few would be surprised if India’s attempts to upgrade its crowded and inefficient airports through the privatisation route are further delayed or even get terminated.

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