Plenty models for airport pvt'tion

There are so many models of airport modernisation all over the world that the Indian skeptics can literally take their pick.

In 1987, the then British Prime Minister Margaret Thatcher made history by selling off British Airports Authority (BAA), now one of the largest transport companies in the world. Combining greater passenger and cargo volumes, higher commercial revenues, and lower operating costs, the BAA pioneered better use of terminal buildings, development of airport shopping malls and other passenger facilities.

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In the decade following the sale of the BAA, some 100 more airports were privatised such as those of Brisbane, Melbourne, and Perth in Australia. Mexico auctioned off its nine airports in a 50-year lease, and Germany sold a 50 per cent interest in its Dusseldorf airport. In 1998, The Hong Kong International Airport started a joint partnershipwith private firms and in 2002 Sydney airport was privatised in a record $3 billion deal.

There are so many models of airport modernisation all over the world that the Indian skeptics can literally take their pick. While all political parties agree on the urgent need to modernise, they differ in approaches. The Left is apprehensive that privatisation would hamper self-reliance and compromise national security.

But even the US government, grappling with the security fears has successfully leased certain small air-carriers and airports to private firms and independent public authorities. While, the government owns airports, controls prices and ensures fair access and long-term development, the private companies plan, design, finance and manage facility under government policies.

In India, the Kochi international airport was built with private participation right under the gaze of the Left parties. The greenfield airport was constructed by Kochi International Airport Limited, a company promoted by the Kerala government with equity participation from a large number of NRIs (about 25 per cent) and financial institutions. In 2004-05, it posted a profit of Rs 28 crore.

The Kochi airport company was placed second, behind Auckland, in the matter of rate of profit among similar companies in Asia and Europe. Given the steady rise in revenues, it proposes to cut landing charges by 2007 and abolish them altogether by 2012, which will make it the first airport in the world to do so!

Since the total cost or modernising India's airports is estimated at Rs 7,000 crore and the government of India claims that it can raise only Rs 2,000 crore, it is only rational to look for private investments. Almost all international examples show that modernization does not mean transfer of ownership or even control and sovereign functions such as immigration and security continue to be controlled by government agencies.