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Airport Privatization Proceeds in India

Leonard Gilroy
February 6, 2006, 5:24am

Today's Wall Street Journal has an update on airport privatization in India:
Last week, India's GMR Industries and Frankfurt airport operator Fraport won the bid for New Delhi's airport, while India's GVK group and its South African partner will take Bombay. The private operators will control a 74% stake in each airport, while the state-controlled Airports Authority of India will hold the remainder. The deal is one of a string of airport privatizations globally in recent years, stretching from Sydney to Rome. That's a positive trend, given the way governments tend to turn anything they operate into a source of political patronage. Sadly, there wasn't much time to celebrate this sale before the trouble began. Communist parties opposed the privatizations. The bidding decision, hampered by inexperienced government oversight and a last-minute switch in the bidding rules, was challenged by a rival consortium led by Reliance Airport Developers. That development threatens to spark a lengthy legal battle. Then, thousands of employees decided to strike, leaving airports in a state of filth as passengers literally navigated through garbage. And yet, the job did eventually get done. Better still, New Delhi stood its ground against the strikers. "There is no question of reversing the decision on Delhi and Mumbai," Civil Aviation Minister Praful Patel said during the heat of the battle. And in the end, the four-day strike ended with the protesters winning little more than promises of job security that weren't much different from what was agreed to before.
Noting the popular support for reforms and liberalization in India. the Journal adds this tasty bit:
The local press went even further, venting its frustration against the Indian Left. "What is the price of allowing comfortably compensated, tenure-protected, work-wary state employees to define what should or should not be done? . . . Are we free market loonies simply because we want better services for which we are ready to pay?" seethed the Indian Express. The publication made the trade unions' position look even weaker by painting a picture of foreign visitors arriving at New Delhi's airport mid-strike and being greeted by darkness and filth.
When was the last time you saw a big city U.S. newspaper take such a strong stand against public employees unions? Kudos to the Indian Express!

Leonard Gilroy is Director of Government Reform


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