Skip to Content

Parliamentary committee recommends UDF witdrawal, reopening HAL

up
230 users have liked.

In what is sure to be a shock, to both the BIAL and HIAL consortia, the Deccan Chronicle reports, the parliamentary standing committee on transport, tourism and culture, on Thursday October 23, recommended immediate withdrawal of user development fees (UDF) being charged by Hyderabad and Bengaluru airports.

It said the private operators had invested only Rs 330 crore and Rs 240 crore at Hyderabad and Bangalore respectively to develop the airports.
The rest of the amount came from the AAI, state governments and through debt from financial institutions.

Observing that the government’s policy was to make air travel more affordable, the committee said the UDF imposed on passengers “may be withdrawn immediately and no more UDF may be imposed on passengers in any of the airports.”

The committee has also recommended that the HAL airport in Bangalore, and the Begumpet airport in Hyderabad be used for short-haul domestic flights.

The committee, headed by the CPI(M) leader, Mr Sitaram Yechury, said any future greenfield or brownfield airports should be developed with the Airports Authority of India (AAI) having a majority stake in a joint venture.

What impact this recommendation will have on the pending UDF requests of the consortia at Delhi and Mumbai is also to be considered.

[PS: cross posted from My Aviation Blog]

Comments

A historic day

up
125 users have liked.
This reccomendation will go a long way in ensuring that there is competition in infrastructure. More importantly, it will make the management of BIAL esp Brunner and Co pay for their actions. They consider Bangaloreans cheapskates and fools by claiming to have invested in "Rs. 2500 Crores" in a world class airport! I look forward to HAL resuming flights soon. This time, it will compete head on with BIA instead. I reccomend GoK come up with a better vision ahead for HAL by completely overhauling HAL and more importantly, the access roads to HAL.
silkboard's picture

Wow - and everyone gets away

up
88 users have liked.
mcad, you said: "it will make the management of BIAL esp Brunner and Co pay for their actions. They consider Bangaloreans cheapskates and fools by claiming to have invested in "Rs. 2500 Crores" in a world class airport!" Well, in what seems like an auditing fraud which could have anyone from MoCA, AAI mid ranks, GoK, BIAL, to who knows even the judges involved, everyone besides BIAL gets away rather easily now. And if I can predict this right, BIAL may get 'rewarded' by getting share of revenues from HAL airport as well. Its also interesting to see arguments in favor of competition for a sector which can create customers base only by running huge operating losses. All this while the basic stuff, for which we have million of customers willing to pay - urban transportation, power, water - those are not up for competition. This has been one stinking project - a perfect example and case study on how large PPP projects are setup for failure simply because they are convenient ways of bypassing government's regular tendering and contracting process. Hope RTI norms get extended to PPPs. Hope that PPPs and businesses learn better ways to deal with the dirt that dealing with government entails. And for us, the public, lets be happy reading what we will be told via our morning newspapers. Happy court battles everyone. And let us predict a CBI inquiry as well, sooner or later.
idontspam's picture

Only a recommendation

up
105 users have liked.
This is only a recommendation not a foregone conclusion. It is recommendation from a panel headed by CPI(M) what did we expect from it? We will realize the impact of scuttling BIA 5-10 years down the line. If HAL is opened to pander to the greed of business houses wanting to save 625(UDF) per person; Bangalore will be the ultimate loser. The comittee wants AAI to take over BIA then be prepared for the same quality of service and unaccountability that existed in HAL. Now you can hold BIAL accountable for QoS after AAI you cant even do that.
idontspam's picture

Fuel surcharge

up
119 users have liked.
Oil is down to $61 per barrel down 100% since its highs. Has the fuel surcharge on your ticket come down even by 25%?
idontspam's picture

Dance/Drama and the airport

up
106 users have liked.
So much Natak and eyewash to get HAL to open!!! I suggest this... Hike up AAI/GoK stake in current BIAL board to majority. KEEP HAL CLOSED and let see how the new org develops the BIA from then on. Their committment, quality of service etc. The proof will be in the pudding.
narayan82's picture

I agree

up
134 users have liked.
I think Idontspam has put this in context! Its a CPI(M)Led reccomendation - what else can we/did we/ would we expect? Ofcourse any ruling left party would insist on a shabby, state run cowshed that runs as an airport! Before the government wants to take over any such facility, why cant they prove that they are capable of running any entity in the manner in which pvt parties run the same? I dont see ONE shining example! Air Traffic Population has come down (againt all predicted odds), connectivity has improved (I did it in 1 hour flat at 8 PM from MG Road) and we have expensive long term solutions (HSRL/ELevated Expressway) - yet still we want to fight over the same problem? Why dont we pick another one for the next 1 year and put all this energy into it?
Narayan Gopalan
User Interaction Designer
Bangalore
silkboard's picture

And the talk of improving connectivity to HAL airport

up
123 users have liked.
Let the city government prove its mettle by improving connectivity to any place of its choice in the city. Pick your points - Majestic to Whitefield, Peenya to Yeshwantpur, Wilson Garden to Indira Nagar. Whatever. Pick your route and show to us that you can move people at double the average speeds that exist today. I bet that with your present thoughts filled with flyovers and wide roads with no serious will to enforce traffic rules, you can't do a thing. And then we will buy your talk that you can improve connectivity to HAL airport from various points in the city. Actually - I am not throwing empty rhetoric here. From what I hear, ABIDe has a similar recommendation - pick one stretch and make it a model. I am eagerly looking forward to getting that implemented within the present setup of I blame you, you blame me and we will be a happy family.
Devesh's picture

A JV of AAI+BIAL for HAL terminal ?

up
91 users have liked.

 

Guys, the private promoters have brought in the small amount, about 450 Crs from Government, about 1400 Crores from banks that the corporation will have to pay. It may explain why the costs at BIAL are so high. I am sure the interest is killing them. While I believe in re-opening HAL, I do not believe it should be done in a hasty and irresponsible manner. Just short haul will not work and un-restricted will damage BIA beyond hope. We have to strike a balance. Limit the passengers to 3 million per year, and involve BIAL in a JV with AAI and HAL. Let HAL get the airside Landing, Navigation, etc. revenue, the JV will get income from ground handling and terminal operations. Then there is a stake and interest for all the stakeholders. BIAL as an airport is a valuable asset as is HAL. Our actions must ensure survivability for both. As a nation with limited funds, we cannot afford to waste investment.

-----------------------

Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

 

-----------------------
Regards
Devesh
Bangalore Aviation
Enjoy life, destroy FUD
Naveen's picture

Air Traffic Down

up
108 users have liked.
Currently, the no. of air travelers is down after the phenomenal increases in recent years. I wonder if two airports are financially viable at this stage. The nos. are still small (10 million+ per annum for Bangalore compared to some 26 million for Mumbai, the largest in the country) & BIAL seems quite adequate & satisfactory - the lull will give them some bit of a breather to regroup & be ready when the nos. are back on the rise. Thus, the "recommendation" might just remain academic, & may not actually result in the reopening of the two airports that had been closed. The UDF may however, be rolled back & withdrawn.
Devesh's picture

BIAL will not accept "no UDF"

up
114 users have liked.

 

I do not see a situation where BIAL can or will accept "non UDF". BIAL is in a precarious situation. Too much UDF will hurt the already fragile traffic, and none will hurt BIAL. A fine balance will have to be struck by BIAL management.

--------- --------------

Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

 

-----------------------
Regards
Devesh
Bangalore Aviation
Enjoy life, destroy FUD
n's picture

"Other" view

up
115 users have liked.

I am going to play the Devil's advocate - my apologies in advance if I seem to tread on some toes. An earlier blog (referred to as b-old) is a good reference point. Is Sitaram Yechury qualified to comment on aviation/infrastructure matters? This is similar to the CAG coming down heavily on the long-gestation defence projects or the more hilarious (and completely shameless) ministers from our esteemed state qualifying that the airport is inadequate (may be because they wanted a junket and VIP facilities). One wonders why they didn't give "constructive" suggestions at the planning stage? Why isn't anybody here raising a hue on cry on money spent on VIP facilities? Who pays for it and why is it "necessary"? Can't they use the "regular" business lounge?

Devesh argues in b-old and elsewhere that "the promoters refused to pump in a measly Rs. 200 Cr. additional, to ensure the required corrective action." and that the terminal had to be increased for the higher passenger load. In the same blog (or here) and here there is clear indication that the passenger traffic dropped - so is it now time to somehow "shrink" the airport? If the airport was bigger, there would have been under-utilization and consequent loss. Incredibly, Devesh still says "Given this scenario, the financial viability of both HAL and BIAL operating together needs to be examined. Both airports will experience insufficient traffic and will be hurt financially." Sir - is it desirable for two airports to be under loss? Isn't it contradictory to still want the HAL airport to open?

mcadambi said that "They consider Bangaloreans cheapskates and fools by claiming to have invested in "Rs. 2500 Crores" in a world class airport!" In b-old, the cost was shown in a pie chart - if the govt./public owns minority stake, why will they repay the majority of the loan back? In other words, the loan+interest will be paid by the private parties and hence they have "invested" indirectly. World over private companies tend to borrow for large-amount projects.

silkboard said "This has been one stinking project ..." - how about the old HAL airport - how much did it work through "regular tendering and contracting process"? Is there one good (read world-class) AAI-run airport in India? When publicly-traded corporations (with shareholders and/or public's money) are not held accountable to adhere to government's regular tendering and contracting process why should ppp (w/ minority stake of govt./public) be subject to the same? The framework agreement is clearly mentioned under BIAL -> About BIAL -> "Legal Framework". If anything, the govt. has to be petitioned under RTI to come clean on the concessions offered. Again, to attract private investment offering concessions is pretty normal - private companies never invest with charity or larger public good in mind.

idontspam talks about reduction in fuel - this article should throw light on why fuel charges are still high ("ATF prices in India for domestic carriers are today 60 to 70 per cent higher than international ATF prices.") I have seen a dozen or so international/big airports around the world - the old HAL airport was a "matchbox" that was only slightly better than our railway stations and bus stands.

The new airport has seen more brickbats than praises - people have been blaming the airport authorities for toilet paper being askew (how about people's civic sense?), a little more time spent on connecting the aerobridge to the plane (the operators need to learn and will take time) and so on. In fact it is very commendable that the airport administration took the initiative to build the trumpet interchange for public convenience. Also, it is an engineering feat to build such a large, complicated and logistically-demanding project in under three years. It is difficult and time-consuming (read expensive) to make changes as and when demanded.

An excellent article talks about the thought-process behind the project. As for the rest of it, consider it like a new home - the decorations and improvements can always be added once the basic and necessary structure is sound and in place. Also, a clearer picture about the capacity (or lack of it) and serious shortcomings at the new airport will emerge after sustained usage of at least 1-2 years. Before the public throw out criticisms they need to understand that people at the helm of the airport have had lots of experience in managing airports; also, the public should dig a little deeper and educate themselves a little more so that the criticisms carry more weight. I am honestly proud that my home city has one of the best airports in India.


silkboard's picture

n sir, pardon me

up
95 users have liked.

... for I am not with Devesh, Mcad etc in supporting reopening of HAL airport. Standard points there

  • making best use of 4000 acres of land given to BIAL
  • can't expect HAL airport to get world class if AAI runs it,
  • and that BIA will with time help de-congest and spread out the city.

Anyway, don't want to repeat all that stuff again. But you seem to have a single lense view - if one says anything anti-BIAL, he/she must be wanting HAL to reopen. Large PPP projects with significant public holding (4000 acres of land, plus all the cost of building connectivity - these two should count for something) need to have some norms of transparency to make sure the PPPs don't get used to award most of the work to some select minister's or babu's extended family, with deals being done at above market prices to inflate project costs (whats a kickback?). Who is asking for the sarkaari tendering process here, just some transparency - clear accounts and details of all spending done during build phase of the project. And last, n sir, stinking project is different from stinking airport. I quite like it, not splendid, but certainly better than good enough.

idontspam's picture

My point still stands

up
108 users have liked.
I still maintain, Crude is down by more than 100% from its high why isnt there a drop in ATF and hence the ticket price? Also, We have heard the CPI(M) led committee say it is the govt's responsibility to provide affordable travel so open HAL. If it is indeed their responsibility then they should be reducing ATF taxes. They should be asking Indian airlines to fly at garib rath rates.
bayern's picture

No plan to reopen HAL airport: Patel

up
97 users have liked.
The heading of this article posted by Devesh at Praja is misleading which makes one believe that HAL will be reopened, but according to Deccan Hearld, the title of the original article is highlighted in bold as "No plan to reopen HAL airport". I guess this was another propaganda stunt from Mr.Devesh to mislead public http://www.deccanherald.c...
bayern's picture

Why do we need to reopen HAL?

up
105 users have liked.
Why do we need to reopen HAL?. The current traffic is around 10 mill pax and BIAL is quite capable of handling the current traffic, so whats the rationale in reopening HAL when there is absolutely no demand nor traffic for a second airport. Have you done a similiar sanity-check for reopening HAL like you did for the high speed rail link to BIAL. It appears that you want to reopen HAL even when the fundamental ecconomics says otherwise. Why waste tax payers money on re-opening HAL when other infrastructure projects are waiting for funds?
narayan82's picture

Why not get some more audits while we are at it...

up
120 users have liked.
Why did we have a CPi(M) doing an Audit? I mean, the outcome is so predictable. Event if BIAL was bigger than JFK, the committe would probably say "Re-Open HAL!" So while Mr Yechury is at it why done we ask him to make some "reccomendations" for the following: 1. Bangalore City Station - is that the quality of service I get for the price I pay? 2. Bangalore Roads (?)- Is it affordable for me to pay 3 times maintainence on vehicles as compared to other cities? 3. BMTC - Are they giving us what we deserve? Do I have Public Transport as a viable option. ---------------------------------------------------------- I Just feel that these Reccomendations have been blown out of proportion. Some newspapers even belive that this should be thier main story!
Narayan Gopalan
User Interaction Designer
Bangalore
Devesh's picture

Bayern, you should apologise

up
117 users have liked.

 

The heading of this article posted by Devesh at Praja is misleading which makes one believe that HAL will be reopened, but according to Deccan Hearld, the title of the original article is highlighted in bold as "No plan to reopen HAL airport". I guess this was another propaganda stunt from Mr.Devesh to mislead public

-------------------------------

My post was accurate and quotes newspapers on what the Standing Committee has recommended in its report. I do not appreciate, and I do not believe it is an acceptable behaviour on Praja to call someone a liar without backing up your statement. I challenge you to tell me what is inaccurate in my post, failing which, have the courage to apologise. You have posted another article which quotes Praful Patel, and I respect your post. Just because you have made your post, does not give me the right to call you by some other equally inflammatory or derogatory terms as you have done to me.

-----------------------

 

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

 

-----------------------
Regards
Devesh
Bangalore Aviation
Enjoy life, destroy FUD
bayern's picture

apologise for what?

up
101 users have liked.
I did not call you a liar, you just made that up. I said you are misleading people by highlighting or picking only an extract of an article thats favorable to what you want to convey and ignoring the rest. And this is not the first time, since the opening of BIAL you have been posting "selective quoted articles" which favors your agenda in various forums like praja, SSC, your blog and whatnot. Misinterpreting facts to glorify your stand and posting it in multiple forums to create a different outlook is propaganda whether you like it or not. Here are few examples: * When its convenient for your argument, the cost of the airport(BIA) is either 2500cr or 10000cr * Claiming the private promoters have invested only 200 crores, but cleverly leaving aside the fact these private promoters are responsible for the interest and repayment of the large loan they have taken from the banks to build the airport I can go on and on ... How about using a fair & balanced approach for your cause, instead of criticizing BIAL for anything & everything
Roshan977's picture

HAL opening is much desired

up
146 users have liked.
There are a lot of people in Bangalore who want the HAL Airport opened. Its in the heart of the city and even though it may not be as fancy as BIAL, its much more convenient. "I would rather be able to get to the airport without a hassle and just board my flight rather than take a cumbersome drive to BIAL and enjoy the so called beautiful airport." Many who do not want HAL Airport opened are those who have invested in real estate near BIAL and want that area to see even more growth. If you can have multiple railway stations, I don't see why we can't have two airports. Public benefit should be the main concern. I think even domestic airlines would be happier to work from HAL as business has been hit after shifting out of HAL.

Praja.in comment guidelines

Posting Guidelines apply for comments as well. No foul language, hate mongering or personal attacks. If criticizing third person or an authority, you must be fact based, as constructive as possible, and use gentle words. Avoid going off-topic no matter how nice your comment is. Moderators reserve the right to either edit or simply delete comments that don't meet these guidelines. If you are nice enough to realize you violated the guidelines, please save Moderators some time by editing and fixing yourself. Thanks!



about seo | blog