Wednesday, December 23, 2009

Can the BIAL agreement be renegotiated?

Can the BIAL agreement be renegotiated?

State and central governments have the power to terminate the deal but the process is complicated, ticklish, and time-consuming

Srikanth Hunasavadi. Bangalore

The state and central governments have the supreme power in terminating an agreement related to any work under way or executed already.
This rule is applicable to the Bengaluru International Airport Limited (BIAL) too but the process is cumbersome and ticklish. Above all, it takes a lot of time.
After examining facts related to BIAL, the Karnataka joint house committee (JHC) headed by Dr Hemachandra Sagar recommended the state and central governments to renegotiate the concession agreement reached between the Government of India and BIAL on July 5, 2004.
According to the recommendations of the committee, the state has to follow some methods to renegotiate the agreement. First, a detailed discussion has to take place on the floors of both the houses of state legislature. Then the government has to accept the report.
Afterwards, if recommendations are to be implemented, the cabinet has to approve the committee report. Since air ways is a subject that belongs to the central government, it is also a party to the agreement. Hence, the Union government has to accept the recommendations. But it is difficult to get central approval for the recommendations, legal experts say.
On April 16 2008, the Karnataka High Court had ordered for negotiation of the agreement. The then chief justice Cyric Joseph, who headed the division bench, gave this order.
"Although we are not persuaded to pass any interim order directing the BIAL not to close HAL airport for commerce and civil aviation operations and not to levy user development fee from the passengers' point of view, we are of the view that in the light of the parliamentary committee's recommendations, the Union of India should seriously think of the need for negotiations," counsel GR Mohan told DNA.
"According to section 32 of Monopolies Restrictive and Trade Practices Act and Section 23 of Contract Act, the concession agreement is void. The government can cancel the agreement and no damages have to be paid.
"The government can take over the share of airport and it can be operated by the Airport Authority of India(AAI). As per parliamentary committee and joint house committee recommendations, it is necessary to renegotiate the agreement," said counsel BC Thiruvengadam.


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