In an era of greater private participation in infrastructure, the liberalisation of airport infra has been the most guarded so far. The example in the limelight is the new Ground Handling Policy this year, which limits competition to only three options among vendors. Airlines say the policy would reduce control and efficiency, and escalate costs in the already beleaguered sector. Shashidhar Nanjundaiah writes.Prime Minister Manmohan Singh's meeting with airline officials on 26 November brought up four issues, out of which three were directly or indirectly related to airport infrastructure: ground handling policy, airport fees and high aviation turbine fuel (ATF) taxes. The meeting was more of an appeal rather than a discussion, since the PM promised nothing and only heard the airlines out. Although the meeting accomplished little in concrete terms, the airlines' reiteration that the ground handling policy needs to be firmed up sooner rather than later will find resonation among not just other airlines, but private ground handlers, both domestic and international. However, the airlines are hopeful that the government will take a re-look at the Policy.Almost as if in ironic contrast, there were two breaches of security by contract workers in Chennai in November alone. Airports Authority of India (AAI) admitted that the monitoring of contract workers was not up to the mark, adding, to good measure, that a massive drive would be launched to check the background of the contract workers employed in the operational area. AAI said the Ground Handling Policy, aimed at keeping out contract workers from ground handling activities, might effectively address the issue of outsourcing of jobs by the airlines.So does the controversy that surrounds the Ground Handling Policy have to do with competition, finance, efficiency or quality? The answer is probably that it will be a combination.StatusGround handling includes aircraft handling, passenger handling, check-in services, cargo services and cargo clearing services. All over the world, private ground handling agencies are employed. In India, too, airports have had their own ground handling agencies so far. The new policy bars private airlines from cargo scanning, baggage handling, taxing, refuelling and cleaning of the aircraft among others, and allows only three operators in ground handling in six of the biggest airports: Delhi, Mumbai, Bangalore, Hyderabad, Kolkata and Chennai (since they handle most of the traffic and cargo in the country). Sensitive airports such as Jammu, Amritsar and Cochin airports are not covered under this policy. The six main airports will have only three ground handlers each:1. One will be a subsidiary of Air India, such as the Air India-Singapore Airport Terminal Services-a deal that has already attracted a complaint from employees of Air India Air Transport Services Ltd (AIATSL), the ground handling arm of Air India. 2. The other ground handler will be the airport operator, in alliance with a ground handling partner. 3. The third handler for these six airports will be a specialised ground handling agency selected by the airport operator through competitive bidding.The policy comes with the approval of the Cabinet Committee on Security (CCS), and the aviation ministry has shown its disgruntlement at airlines' failure to implement the Federation of Indian Airlines (FIA) had moved the Delhi High Court to stay implementation of the policy, but in April, the court quashed the order. The Supreme Court, in rhetoric (without passing a stay), questioned why the security concerns covered only certain airports and not others. Concerned airline chiefs who met the Prime Minister in November stressed an early decision of a revision of the policy.As illustrated above, security is the major reason for the policy that will limit the number of ground handling agencies, but there is still no word on why it should not apply uniformly across the nation's airports, rather than a chosen few. Even if implemented, the policy could be rolled out in phases, starting with the largest six.On the other hand, with growth in the number of airlines and volumes, airports can only handle so many ground handling agencies, and this is a reason for a policy change, experts believe; with just a few airlines, it is manageable, but when the number exceeds a critical mass, the numbers would be beyond logic.A question of controlBut while security concerns will persist, private airlines are more concerned about competitiveness and efficiency. The spirit of competition lies in differentiating their service or product, they say, and the policy essentially goes against the concept of competition by mandating common vendors for all airlines operating from an airport. Arun Chandran is the Director (Aviation & Project Management Services) at Parsons Brinckerhoff and Project Director for the consulting company's Delhi T3 project, and says that while there are security and safety benefits to the policy, the airlines under this policy will need to use a set of resources at the six metro airports from the authorised agencies as per their own commercial judgement, and don't have the power to tender out their own. At the non-metro airports the domestic airlines can self handle. Similarly, embedded in competitiveness is customer service, which different airlines address differently, and would like to keep it as a differentiator. The policy limits competition also because the Ministry of Civil Aviation (MoCA) has mandated only three vendors, who then follow the government norms of empanelment and L1 / L2 / L3 options. By calling for bids from multiple vendors for the various activities, rather than clubbing them, aggressive bids can be expected, leading to cost reduction. Developers insist they would like to procure ground handling services from a wider market, while airlines would not like to give up their share of ground handling activities.But above all, it is a question of control over operations. The debate revolves around how many vendors can get involved in an airport's ground handling. With larger contracts on the anvil on an "outsourced" mode (in the form of the third handler, mentioned above), airlines will stand to lose some control over some tasks that they would accomplish themselves. Chandran says the cost is too regulated by AERA as they are aeronautical charges and control is also in terms of being able to manoeuvre the costs based on expenses. Airlines find it more financially controllable to hire their own vendors rather than using a pooled resource. The international cargo companies would also see the policy as a brewing roadblock. In their streamlined systems, handling is an integral part and so the companies frown upon an attempt to change the system that works well for them.Just the oppositeThe situation in Europe, on the other hand, is completely the reverse of that in India. In November, the European Transport Workers' Federation (ETF) protested against the liberalisation of ground handling services and announced that hundreds of workers in the sector will mobilise at 15 European airports. The action comes ahead of the European Commission's plans to propose, in the coming weeks, a major package of legislation that will include a revision of a directive on ground handling services that is expected to push for greater deregulation in this sector. The unions fear job losses and worsening working conditions. The ETF says the EU does not need more ground handling operators at airports. If the policy is passed in India in its current form, workers will have new strictures, and jobs will be lost. Because of security concerns, contract employees will be under a scanner.Airlines argue that many of their employees engaged in ground handling will lose their jobs. However, developers have already assured airlines that they can absorb most of the existing staff.EfficiencyThe industry has already been directing policymakers' attention to the need for efficient and speedy handling of cargo to reduce its dwell time. Will the new policy, with or without changes, influence the way airports work? Particularly, can it bring in new efficiencies and technologies that can speed up transactions and logistics? The objective of airport policies is to reduce dwell time of exports from the present level of four days to 12 hours, and of imports for the present level of four weeks to 24 hours in line with internationally achieved norms. Cargo clearance will be on 24-hour basis.Infrastructure relating to cargo handling like satellite freight cities with multi-modal transport, cargo terminals, cold storage, automatic storage and retrieval systems, mechanised transportation of cargo, computerisation and automation, etc., will be set up on top priority basis. Such facilities have to come up at smaller places too.Electronic Data Interchange Systems are planned to be developed and linked amongst stakeholders.Experts believe changes are on the anvil: many airports still use agricultural tractors for transporting baggage from an aircraft to the conveyor belt. Some of the airports, including Bangalore International, have banned the use of the smoke belchers. It cannot be coincidental that technological and process improvements have gone parallel to international cargo carriers opening integrated terminals.Independent experts agree that security is a big factor for change in policy. All over the world, security norms changed after 9/11, and there is no reason there should be any exception in India. But as international airports are increasing their dependence on professional ground handling agencies, it has heralded a new era of competitiveness. The brewing suspicion, though, may be that by limiting the number of players in an airport's ground handling activities, a cut in the staff strength is also on the anvil.There are a handful (about 12 major ones) of ground handling companies in India, but the real competition would be from foreign players, and that seems to be real stumbling block triggering a policy change.