Wednesday, September 09, 2015

Developing India’s airports: Private role is a public question

The government’s latest decision to shelve a proposal to develop and improve efficacy at four airports at Chennai, Kolkata, Jaipur and Ahmedabad on public-private partnership (PPP) basis and instead opt for awarding operations and maintenance (O&M) contracts to private sector entities only at two airports in Jaipur and Ahmedabad is being questioned on several fronts.
For one, air traffic in India is projected to triple to 570 million passengers by 2025 from the current 190 million. As per data available with aviation advisory firm Centre for Asia Pacific Aviation (CAPA), investments to the tune of $40-50 billion are required to be made to expand/upgrade airport infrastructure across the country to meet the demands for excess capacity arising from the estimated traffic projections. Given the flip-flops in government policy over the airport privatisation and airport tariff regulation programmes, industry experts have raised concerns over capital inflow into the sector.
“We need strategic clarity regarding privatisation, for both brownfield and greenfield (airports), and on economic regulation as this will impact flow of capital into the sector and could determine the level of capacity available over next 10 years. As things stand today, CAPA sees India heading for a serious capacity challenges in next 10 years which will start manifesting in next 3-5 years,” said Kapil Kaul, chief executive officer, CAPA.
09/09/15 Sharmistha Mukherjee/The Indian Express
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