| If
anyone had any doubts about the misleading analysis
and suppression of information purveyed by most of the
mainstream media, these doubts should be dispelled by
the latest evidence with respect to the recent strike
by airport employees. This has been widely reported
as the retrogressive actions of some employees who simply
want to keep their jobs and are therefore impeding modernisation.
The
chaos and mess at airports and the inconvenience of
passengers has been described in the media in the most
agonised terms, with frequently expressed fears about
how this strike will adversely affect India's ''international
image''. In the process, the real reasons why the airport
employees have taken the decision to strike, and issues
relating to the modernisation or privatisation of airports,
have actually been suppressed.
The argument is being presented as one in which those
who want to expand and modernise India's airports are
being prevented by a bunch of backward looking trade
unionists who want everything to remain the way it is.
But this is the opposite of the truth. The workers'
fight against privatisation is based on the argument
that a perfectly acceptable and desirable plan for modernising
the airports has been available, presented by the Airports
Authority of India to the Cabinet nearly three years
ago, using the available cash reserves of the AAI as
well as borrowed funds.
In fact, if the central government had not deliberately
held up this plan, the country could already have been
benefiting from the latest and most modern airports
especially in the metros. Instead, this proposal was
suppressed, because the basic aim of both the previous
NDA government and the current UPA government has been
to hand over airports to the private sector. So this
is a clear case in which a public sector organisation
has been run down and not allowed to modernise using
its available reserves, to pave the way for eventual
privatisation.
As a result, there is no question now that most of our
large airports are in a mess, badly short of space and
services, and desperately in need of renovation or even
complete overhaul. This has adverse implications which
go beyond the convenience of passengers, since airports
have become important hubs of trade and so this affects
cargo trade and commercial promotion generally.
There are now many examples of different ways of managing
airports. The experience so far suggests that even where
airports have been ''privatised'', in most cases this
has not meant the actual transfer of ownership or even
control.
This is because airports, and especially those which
are major national or international hubs, fall very
clearly in the category of strategic infrastructure
assets, and it is usually seen as crucial to maintain
some degree of national control. This is why most governments
- even champions of privatisation such as Australia
- have put definite restrictions and caps on the proportion
of foreign investment and the actual control exercised
by foreign parties.
Add to this the fact that airports are by definition
natural monopolies, since location-specificity implies
that there is no real choice, except perhaps for airlines
in the process of choosing which ''hub'' to use. Otherwise,
it is hardly possible, say, for passengers to say they
would prefer to fly to Chennai than to Delhi because
of better airport facilities in the former. This feature
of being a natural monopoly means that if an airport
is not under direct public control, it must at least
be under strong public regulation to ensure that unfair
monopolistic practices do not become rampant.
Internationally, the most successful examples of airport
management typically involve some amount of private
outsourcing for particular activities while retaining
overall public control. Thus, many airports have successfully
brought in private parties to invest in cargo handling
facilities or even whole terminals, hangars and parking
bays, servicing and overhauling facilities, marketing
and shipping yards, export zones and so on. Such contracted
services dominate as the main form of ''privatisation''
in most airports in the US, Europe and Japan.
There is a further point. Obviously, the development
of airports has to be in accordance with a master plan
for the relevant urban area, which considers the overall
development of not just the airport but also the surrounding
region. Therefore it clearly cannot be undertaken by
any private party in isolation, but requires the involvement
of local government bodies, industry associations and
other groups.
The issue of cross-subsidisation is also important.
This is probably the most important feature of most
transport networks which has encouraged public holding
of such facilities. Thus, railways in India use profits
from heavily-used routes to finance losses from providing
services to more remote and less heavily trafficked
areas. The same is true of the public airlines - it
is obvious that most private airlines only flog the
very profitable inter-metro routes and avoid smaller
cities and towns which nonetheless require such connectivity.
Similarly, thus far, the AAI has used the profits made
from major metropolitan airports (such as Delhi and
Mumbai) to promote and support the development of airports
in other cities, smaller towns and more remote locations
which would not command the same interest. Mumbai and
Delhi airports are the most profitable and heavily used
airports in India, and losing them would dramatically
reduce the funds available with AAI to develop other
airports.
AAI is currently one of the more profitable public sector
companies, with reserves and surplus funds of Rs. 3,000
crore, and almost zero-debt status. This can easily
meet the anticipated expenditure for the development
of the airports of the country, including those in Delhi
and Mumbai, especially since the corporation can leverage
this healthy financial condition to raise loans from
the market.
Instead, the UPA government has clearly gone against
the promise made in its own CMP, and opted for straightforward
privatisation without adequate consideration of the
security, strategic and other issues. And the entire
bidding process has been extremely irregular and full
of impropriety, leading to accusations of subjectivity
and manipulation to favour certain parties. It led to
a situation where only two bids were treated as viable
for the two airports, implying no contest. Even the
highly respected outside expert appoint by the government,
Mr. Sreedharan, pointed to flaws in the criteria used
for shortlisting, and in effect suggested that the entire
bidding process be reopened.
In such a background, it should be evident that the
airport workers on strike were not fighting for their
own jobs or wages, but for what is the national interest.
Instead of recognising the real issues and creating
the basis for a genuine national debate, most of the
mainstream media has chosen to obfuscate and suppress
the vital information which matters as much for the
future of the country.
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