India to privatise two key airports

Delhi airport is hoping for an upgrade

India is to privatise the country's two main international airports in Delhi and Bombay (Mumbai).

It is hoped the move will attract money to upgrade the airports to world standards.

Under the plan, approved by the Indian cabinet, private firms will be able to buy a stake of up to 74%.

The rest will be held by the state-owned Airports Authority of India, which will continue to be in charge of air traffic control and security.

The plan to sell off the airports is part of the Indian government's wider privatisation drive, which aims to raise 132bn rupees ($2.9bn) in the current financial year ending in March 2004.

Question mark

The sale of the airports would be the biggest privatisation of any infrastructure project in the country.

The government has put an eight month deadline on the sell-off process.

But analysts were already suggesting that the drive may lose steam ahead of state elections later this year.

The government has already caved into political pressure by ditching with plans to sell a chunk of the country's National Aluminium Company.

Privatisations are very unpopular in India, primarily because streamlining companies is likely to result in heavy job losses.

The fact that privatisation is often a key requirement of the International Monetary Fund - which is strongly opposed within India - is another reason for its unpopularity.

In addition, some of the more hardline supporters of the Hindu nationalist government believe that privatisations which take ownership outside India are effectively unpatriotic.