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From The Editor's Desk - Second Issue February , 2006


Airports: Modernization Bid By Government

IN FOCUS
IN FOCUS
IN FOCUS
IN FOCUS
MY DREAM JAIPUR AIRPORT
ATC DAY, JAIPUR- 2005
ATC DAY, JAIPUR- 2003
AVIATION HUMOR
INSPIRATION
FIRST PERSON


Airports are truly the gateways to our country. They depict the face of our culture, facilities, ethos and economics. All of us agree that they need to be modernized vis-a-vis more facilitation to the travelling passengers and all the operating airlines who are our users.

As of now Airports Authority Of India (AAI ) is managing 126 airports including 13 International ,9 customs and 79 domestic airports in India .In the year 2004-05, AAI, which represents a monopoly situation in India ,generated a revenues of approximately Rs.2700crores and a profit before tax of Rs.600 crores. Of this total amount, nearly 60% of the total revenues come from Mumbai and Delhi Airports. That is, about Rs.1600 crores come from Mumbai and Delhi Airports out of the total 2700 crores.


In such a scenario, there were two options left with the government. Either asking AAI to modernise Delhi and Mumbai Airports which were the most used airports in India or modernise these airports by involving private sector participation. AAI was financially capable to modernize these airports with a balance sheet size of around Rs.3000 crores in terms of net worth. But the Govt. of India chose to ask AAI to go beyond and develop the rest of the remaining airports with it and involve private sector participation for developing Delhi and Mumbai Airports.

The modernisation of Delhi Airport was awarded to the Hyderabad based GMR group which has a tie-up with Fraport and Malaysia airports .The task of modernising the Mumbai Airport has been awarded to another consortium, the GVK group, which has a tie-up with South Africa Airports.

What is the position of AAI in this new scenario? The AAI as per the shareholders agreements remain 26% shareholder in the new entity. So, it obviously gains 26% of the profits that the new airport ventures will make .But more than this ,46% of the revenues Of the New Delhi Airport and 38% of the revenues of the new Mumbai Airport are to accrue to AAI as per the terms and conditions of the joint venture. Financial Analysts predict that the revenue of Delhi and Mumbai Airports in the new scenario are likely to grow at the rate of 20% per year for the next 5 years .In case AAI itself was at the helm of the affairs instead of the consortium, this growth could have been used systematically to sustain the growth of the rest remaining airports in the order of their importance.

But the path has been chosen by our able leadership. Let us all work positively and shape the modernization of our airports for our customers to match the standards of the best in the world.

A. Sanyal
 
             
 
 
     
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