Page 30 - AAA SEPTEMBER - OCTOBER 2013 Online Magazine

FEATURE INdIAN AIRPORTS

75% is expected to be contributed by the Bangalore and Hyderabad, and the
private sector. AAI itself will contribute modernisation and expansion of Delhi
175 billion rupees. and Mumbai airports, totalled 300 billion
“The balance amount of 500 billion rupees. At the same time the AAI invested
rupees is expected from the private 125 billion rupees in upgrading Chennai,
sector,” notes the AAI. But in the last 11 Kolkata and 35 non-metro airports. So
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Five Year Plan period from 2007–2012, the money is there, even if not quite as
the US$425 billion invested in overall much as the government hopes – but will
infrastructure fell short of the planned it continue to flow?
US$514 billion, leaving a substantial “If foreign investment is to be attracted,
US$90 billion shortfall. Of this, the private India will need to provide external capital
sector was expected to contribute 50%, [investors] with greater confidence with
adopting a debt/equity ratio of 70:30. respect to market risks. This will require Kapil Kaul, CEO, South Asia, CAPA
During this period, the private sector clarity on the regulatory framework,
played a previously unprecedented improved governance, enhanced
role in terms of its contribution to the coordination between stakeholders and ABOVE: Investment by private
development of airports which, with stronger execution capabilities,” CAPA’s operators in the construction
of greenfield airports at
one exception at Cochin, had previously Kaul asserts. Indeed, private players Bangalore and Hyderabad,
been the exclusive domain of the state- are now warier of undertaking airport and the modernisation and
owned airport operator. Total investment development projects as the environment expansion of Delhi and Mumbai
by private airport operators in the in which they have to operate is now less (pictured) airports, added up to
construction of greenfield airports at favourable than it was just a few years ago. 300 billion rupees

STuMBLING BLOckS
Although many Indian airport infrastructure issues are being addressed in the 12 National Plan to 2017, high costs at
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Indian airports also act as business dampeners. Several international airlines have pulled out already; the proposed joint
venture between Malaysia-based low-fare airline AirAsia and the Tata Group recently said they will skip high-cost Mumbai
and Delhi airports once their AirAsia India takes off. Compounding this, India expects its airports to function as attractive
international hubs, but the federal government’s decision to allow foreign airlines to own as much as 49% of domestic
carriers, and recent moves to ink more bilateral flying rights, quadrupling air capacity with other nearby developed
countries, are likely to spoil the plans of the new airports in the country to become effective commercial hubs. Strategic
planning? It doesn’t sound like it.

30 ASIAN AIRLINES & AIRPORTS SEPTEMBER / OCTOBER 2013 WWW.ASIANAIRLINES-AIRPORTS.COM