The Hindu Business Line : ‘Let existing Hyderabad, Bangalore airports continue’

New Delhi, March 5 With weeks to go before the opening of new airports at Hyderabad and Bangalore, a Parliamentary committee has strongly suggested that the existing airports in the two cities be kept open for commercial operations. It has also called for the immediate withdrawal of the User Development Fee (UDF) that the private sector airport developers plan to levy on passengers flying out of these airports.

The report of the Parliamentary Standing Committee on Transport, Tourism and Culture on the closure of Bangalore and Hyderabad airports has said that the Government still has time to renegotiate the issue with the concessionaire and can modify or scrap the clause that calls for the closure of the existing airports.

The committee pointed out that this was the first time that the Government-owned airports built with tax payers’ money were being closed to make way for the commissioning of private greenfield airports “where profit earning is the main motto rather than service to the passenger. This is contrary to the Government’s policy, particularly in a situation where both the airports are required in view of the changing scenario in passenger traffic. This is in complete contravention of the level-playing field concept,” states the report which was tabled in Parliament on Wednesday.

The Hyderabad airport, which is being developed by a consortium led by the GMR group, is to become operational from March 16 while the Bangalore airport, led by a Siemens-headed consortium, becomes operational on March 31. The concession agreements that the Government has signed for both the projects lay down that the existing airports in both cities will cease operations when the new greenfield airports start functioning.

The agreement stipulates that general aviation services may continue to be provided at the existing airports but not those relating to commercial aircraft, charter flights, aircraft hired or operated under commercial agreements. The committee was of the view that having two airports in a particular city will be a commercially viable option for the operators as the aviation sector was growing in a big way.

‘Fee irrational’

Calling for the immediate withdrawal of the UDF, the committee expressed the opinion that the levy is “illogical and irrational”. The Government has allowed Hyderabad airport to impose UDF of Rs 1,000 while the new airport in Bangalore has been allowed to charge Rs 950. Both the airports have decided not to levy any fee on domestic passengers for the first few months after they open. The Kochi airport, which is also privately managed, has stopped collecting UDF since January 2006.

Speaking to the media a day before the Parliamentary report was presented, the Managing Director, GMR Hyderabad International Airport, Mr Kiran Grandhi, said that the decision to close the existing airport was based on a decision of the Union Cabinet. GMR officials claimed that the company will initially try and explain the reasons for wanting the closure of the existing airport and would look at approaching the courts only as a last option.