Geneva: Privatization of domestic airports should take into account costs, investments and whether such projects benefit the local community, and the government should not focus on getting the highest concession fee alone, International Air Transport Association (Iata) said.
IATA’s Mistry says govt should weigh all options before privatization of airports
Speaking on the sidelines of Iata’s recently concluded Global Media Day, the association’s director for global airport infrastructure and fuel Hemant Mistry said India should assess and figure out if certain airports need a different model, other than privatization.
“But be very clear—Don’t shoot on your foot by concentrating on the highest concession bidder. They should be a programme, consultation process and parameters like the design and facility, and integrated baggage facility, need to be looked at,” Mistry said in an interview. “All the government is currently focusing on is the highest concession fee and the rest is missing,” Mistry added.
The Indian government recently decided to privatize airports at Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru. According to a Times of India November report, the government is planning to offer 50-year-old leases for these airports.
The government has previously found only limited success in privatizing major airports. While it has been able to successfully run airports in Mumbai, Delhi, Hyderabad, Bengaluru under the public-private partnership model, it has failed to attract offers for Jaipur and Ahmedabad airports in the past two years.
“Are you (government) trying to achieve investment, and operational efficiency—the important thing is to do a combination of all these things so that it then sets a path for what the privatization should be,” Mistry said.
“The government needs to consult with the broader industry, find out what is expected from the airports going forward. But the government doesn’t want to be too influenced by the private investors,” Mistry said, adding that in case of some airports, it makes absolute sense for the government to continue as the primary stake holder.
“There is no general rule that if you are building a green field airport, it should be privatized,” Mistry added. When contacted, an official of the Airport Authority of India (AAI) said the government has always consulted stakeholders before deciding to privatize any airport. “It is never a unilateral decision,” said the, person who didn’t want to be named.
In case of Jaipur and Ahmedabad airports, there were no response to the government’s offers for privatization as private entities wanted a greater say in running the operations, and the offer from the government was only for a partial privatization.
“AAI has relaxed some of the terms (of contract),” the person said, adding the agency hopes to get several bids for airport privatization in the coming months.