The privatisation of Australia's 22 airports looks set to become as lengthy a process as the oft-postponed float of national flag carrier Qantas.

While Canberra has at long last released details of the terms for local and offshore bidders, legislation to clear the way for privatisation will not now be completed until the first quarter of next year.

With a lengthy bidding and selection process to follow the first airports, including the major gateways of Sydney, Melbourne and Brisbane, are expected to be handed over to their new owners during the 1996/97 financial year. The remaining airports should be sold off during the following fiscal year.

The privatisation, which should raise at least A$2 billion (US$750 million), was originally scheduled to start earlier this year but a lengthy debate over regulatory conditions - particularly over the amount of cross-ownership to be permitted - caused delays. In the end the government has opted for a course clearly designed to appease anti-privatisation forces, while meeting the demands of commercial interests.

After initially confining bidders to owning a single airport, Canberra has altered course to allow a substantial amount of cross-ownership: one operator can now own two major airports and take up to 15 per cent equity in several others. The successful bidders will be offered 50-year leases but foreign ownership is restricted to 49 per cent.

At the same time there will be strict environmental, planning and pricing rules allowing the government a great deal of control over the future direction of airport operations around the country.

Source: Airline Business