Setting up Private Airports Must be Pursued as a Policy Matter!

  • The Prime Minister recently laid the foundation stone for the Jewar or the Noida International Airport, a greenfield project managed by Zurich Airport International, signifying how the aviation industry is envisaged to emerge in the near future. Hopefully, the timeline to complete the project will be strictly adhered to and not follow the routine of missing deadlines we as a country are so used to. When it eventually starts operation, the Noida International Airport will be the second international airport in the National Capital Region (NCR). Note that both international airports in NCR will then be under private management.

PC: Heerim

  • Of course, the unfolding air traffic scenario is a measure of the success India has had in the last two decades in attracting private capital and management into airport infrastructure development and maintenance operations. Mind you, it has not happened without controversies or litigation, but the journey holds lessons in other infrastructure areas seeking private capital. People in the know would recollect the watershed moment was 2006 when Delhi and Mumbai airports were leased out for 30 years to private entities under Private Public Partnership (PPP) model. Remember, there was huge opposition to the proposed move back then.
  • As if on cue, the same model was extended to greenfield airports in Bengaluru and Hyderabad as well. This move meant in a short span of time; the majority of passenger traffic was flowing through privately managed airports. Further, in 2008, another key development was the creation of a statutory body, the Airports Economic Regulatory Authority (AERA), which was established to exclusively regulate airport tariffs. Make no mistake, this is an essential need in getting both private capital and also buy-in from passengers as infrastructure often has a near-monopoly status which could be countervailed by the regulatory authority for effective operational monitoring.

PC: Lawstreet News Network

  • As the experience suggests, establishing the regulatory authority ensures monitoring aspects of any entity as envisaged in letter and spirit. On the other hand, and to view the setting up of the regulatory authority in the right context, the lack of a regulator as in the case of Indian Railways shows how dismally it has hampered efforts in attracting private capital. On a positive note, the Government of India has been a direct beneficiary of the entire process, having also reaped indirect economic benefits from the ever-increasing traffic – 341 million passengers in 2019-20.
  • It is heartening to note that the Airports Authority of India (AAI) has earned Rs. 30,069 crores from all its PPP ventures till 2020-21, a steady stream of revenue allowing it to develop airfields in certain locations that cannot attract private capital as of now courtesy various reasons. Moreover, the future of greenfield airports and expansion thereby of existing ones will largely depend on state governments. The National Civil Aviation policy expects states to acquire huge tracts of land overcoming litigation conundrums and providing it free for airports. The UP government has done it precisely and other states must follow suit too.

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Krishna MV
Krishna is a Post Graduate with specialization in English Literature and Human Resource Management, respectively. Having served the Indian Air Force with distinction for 16 years, Armed Forces background definitely played a very major role in shaping as to who & what he is right now. Presently, he is employed as The Administrator of a well known educational institute in Bangalore. He is passionate about sharing thoughts by writing articles on the current affairs / topics with insightful dissection and offering counter / alternate views thrown in for good measure. Also, passionate about Cricket, Music – especially vintage Kannada & Hindi film songs, reading – non-fictional & Self-Help Books, and of course, fitness without compromising on the culinary pleasures.