Comorin From United States of America, joined May 2005, 4896 posts, RR: 16 Posted (8 years 11 months 1 week 16 hours ago) and read 2103 times:
There have been several posts on this on A.net, but wonder if someone can shed light on some fundamental issues. I can see how things work in the American political-economic system, but how does it differ in the Indian framework:
1. Stakeholders: Airlines need new airports to grow markets. Local governments can grow local economies by enabling airports. The Central government can enable rapid growth in an industry sector. Airport operators can profit handsomely from such a boom.
2. Motivation and Consequences: Clearly the private sector is competitive and directly motivated by economics. What motivation is there for the Centre to be energized, apart from the public-spiritedness of a few officers? What consequences are there for doing nothing? In the US, industry lobbies are a powerful force, and Congressmen make sure that their districts are well-represented. Do these checks and balances exist in the Indian political fabric too?
3. Municipal Capital Markets: Are local bodies able to tap into the debt capital markets to raise financing to build airports? Would this not decentralize the process for the better, or is the scope of funding too large to for local authorities to raise?
4. Role of the Centre: India's hot industries (BPO, IT) exist because the Govt stepped aside, and let private sector forces work. Isn't this the best role for government - make and enforce laws, provide health, education and security, and foster a growth-friendly economic climate? Are they really to be in the business of building airports? What is the role of the AAI - is it a necessary player in any new airport built?
5. Bangalore Airport: Supposed to be the model for public-private partnership, but ended up a decade-long mess before finally breaking ground. The city itself choked, unable to cope with exploding business growth. Did this expose any flaws in the public-private model?
I ask these questions because Indian A.netters have expressed great pride and excitement in India's aviation explosion, yet seem wary about the Indian Government's ability to react with due speed.
The basic question then emerges: What sticks and carrots are in place to make sure that the local and central bodies are onboard to play their part?
Looking forward to visiting the new 'Taj Mahals' in India soon.
Pomnath From , joined Dec 1969, posts, RR:
Reply 1, posted (8 years 11 months 5 days 21 hours ago) and read 2052 times:
Brief response, to be followed soon in detail.
Infrastructure typically follows, not pre-empts, growth and usage. It also tends to run at full capacity as soon as ready, especially with airports.
To check on the ground realities, please take time out to visit Kochi (Cochin) Airport and in a slight diversionary, the Metro Rail in Delhi.
Likewise, a small airport like Pune (PNQ), exactly 78 miles from BOM, has evolved to become the largest domestic airport in India with only 4 parking bays for commercial aircraft turnaround. One security line, about 20 turn-around flights daily (mostly B-737 and A-320, but a couple of CRJ also), the place hums as a "civilian enclave at defence airport", and serves the purpose.
Sure, we can build new airports, but then in a price sensitive market, the cost to passenger goes up. So, a wee bit of discomfort, and a larger number of small airports opening up all over the country with basic facilities seems to be the ground reality ondate.
Desh From United States of America, joined Aug 2005, 234 posts, RR: 0
Reply 3, posted (8 years 11 months 5 days 16 hours ago) and read 2014 times:
Good observations both Comorin and Pomnath.
Quoting Comorin (Thread starter): 5. Bangalore Airport: Supposed to be the model for public-private partnership, but ended up a decade-long mess before finally breaking ground. The city itself choked, unable to cope with exploding business growth. Did this expose any flaws in the public-private model?
Cochin (or Kochi as Pomnath mentioned) Airport that was started as a public = private partnership with govt representing majority stake. The good thing about that airport is that the govt intended its role to be of a VC - they put the money up front and divest as the airport operations grew profitable. the two places they expect expansion was passenger traffic between Kerala and the gulf (lot of manpower being exported) and cargo. Another area, that I am not quite familiar with is service - basically be a refuelling / crew change stop for cargo airlines flying between SE asia / AUS and the West/ They have state of the art refuelling facilities.
I am not sure bout Bangalore Airport - the airport they are using actually belongs to HAL - a govt aeronautics company - the new one has yet to be built and has run into problems due to local politics - every party was a piece of the pie - sad but true. though in recent times the private sector has managed to get the Prime minister involved and get the ball rolling ...
I think a lot of problems arise from the expected friction when a public sector enterprise goes private.
I would refer you to the following interviews for more info (from the Indian Express)