Centre for probe into BIAL lapses

Centre for probe into BIAL lapses
DH News Service, New Delhi:
While it is a debatable point whether the Legislative Assembly has the right to meddle with the functioning of a greenfield airport, the Centre is of the opinion that the state government and the civil aviation ministry have the right to do so as they hold substantial stake at the Bengaluru International Airport Limited (BIAL).


When opinion was sought on the decision of the Karnataka Legislative Assembly to set up a House Committee to look into the alleged violation of terms and conditions by the promoter company, officials indicated that the ministry’s stand may not be much different from that of state government. They, however, refused to comment on the Assembly’s demand.

Speaking to Deccan Herald on the condition of anonymity, ministry officials pointed out that over the last few months, both the state and the ministry shared similar opinion on different aspects such as facilities, second terminal and runway, need for HAL airport to continue etc.

The ministry was of the opinion that the two governments together held 26 per cent stake (13 per cent each) at the BIAL and they can influence any decision at BIAL board in a major way.

“We can also block any decision if we think it is not good for the airport”, officials added. “The airport capacity and the facilities cannot be unilateral decision of promoters. At the board level, it has to be unanimous.” The BIAL would be answerable to the state government if the House Committee directs the government to take certain decisions on the airport, they added.

Land returned

The BIAL has returned the surplus 400-odd acre to KSIIDC (state government), ministry sources said. Interestingly, Bangalore and Hyderabad airports are not liable to act like Delhi and Mumbai airports in sharing the non-aeronautical revenue. Delhi and Mumbai airports have to transfer 30 per cent of their non-aeronautical revenue to aeronautical purposes but this clause is not applicable to the two southern airports. Thus, suppose the two operators develop real estate, the entire returns go to the promoters’ kitty without any obligation.
“It is not so in Delhi and Mumbai where they have to spend 30 per cent of non-aeronautical revenue on giving facilities to airlines and passengers. This means, there will be cross-subsidy and passengers and airlines get benefited”, officials pointed out.

At the same time, the ministry is now planning to make the Delhi and Mumbai experience uniform to the country in future. “We will include the cross-subsidisation clause in the Airports Economic Regulatory Authority Bill which is before the Parliament”, officials added. Bangalore and Hyderabad airports cannot be bound by this as they operate under the existing contractual obligations.