Airport Privatization in India – A Study of Different Modes of Infrastructure Provision
Manuj Ohri
1
Faculty of Management Studies, University of Delhi. Abstract
The Indian Civil Aviation Sector is in for a major overhaul over the next few years. In the wake of major policy changes taking place (due to a shift in the mindset of the government from considering air travel as elitist to making it available for the common man) and liberalization of air travel services, a sharp increase (5-10% yoy) in air traffic is expected. The airports in India are inadequate for handling this increase and with India hosting the Commonwealth games in 2010, upgrading airport infrastructure assumes prime importance. The problem is further compounded by the lack of resources with the government. Hence, the recent thrust on airport privatization. This paper examines the different modes of providing airport infrastructure in India. Interestingly, these range from government owned airports (use of civil enclaves and government operated airports) to publicly held airports (Cochin International Airport) and airports built/upgraded through Public Private Partnerships(PPP), like HIAL(Hyderabad), BIAL(Bangalore) and Delhi/Mumbai airports. The paper examines the financing, control structure and revenue accrual mechanism in each of the modes.
The paper starts with an analysis of airport infrastructure in India by benchmarking metrics (a number of Revenue Based, Profit based and Input/ Output based metrics are computed) against international airports. Further, key areas of areas of improvement are identified. The author then critically examines the different modes of airport infrastructure provision in India. Two key findings are the use of innovative incentives by the government to attract private participation and the importance of alternate revenue streams (non aeronautical revenues) in making airport projects feasible. The Government of India(GoI) has used initiatives like provision... [continues]
Manuj Ohri
1
Faculty of Management Studies, University of Delhi. Abstract
The Indian Civil Aviation Sector is in for a major overhaul over the next few years. In the wake of major policy changes taking place (due to a shift in the mindset of the government from considering air travel as elitist to making it available for the common man) and liberalization of air travel services, a sharp increase (5-10% yoy) in air traffic is expected. The airports in India are inadequate for handling this increase and with India hosting the Commonwealth games in 2010, upgrading airport infrastructure assumes prime importance. The problem is further compounded by the lack of resources with the government. Hence, the recent thrust on airport privatization. This paper examines the different modes of providing airport infrastructure in India. Interestingly, these range from government owned airports (use of civil enclaves and government operated airports) to publicly held airports (Cochin International Airport) and airports built/upgraded through Public Private Partnerships(PPP), like HIAL(Hyderabad), BIAL(Bangalore) and Delhi/Mumbai airports. The paper examines the financing, control structure and revenue accrual mechanism in each of the modes.
The paper starts with an analysis of airport infrastructure in India by benchmarking metrics (a number of Revenue Based, Profit based and Input/ Output based metrics are computed) against international airports. Further, key areas of areas of improvement are identified. The author then critically examines the different modes of airport infrastructure provision in India. Two key findings are the use of innovative incentives by the government to attract private participation and the importance of alternate revenue streams (non aeronautical revenues) in making airport projects feasible. The Government of India(GoI) has used initiatives like provision... [continues]
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