TLI Staff
New Delhi: Privatization may be cure for many ills but it is certainly not advisable when everything is fine. The government’s move to go ahead with privatization of profitably-run airports is, therefore, set to do more harm than good.
One of the key arguments put forward for handing out the Airports Authority of India (AAI)-run airports to private companies is that it will bring efficiency and investment into the sector. But the question is if the six airports offered to private companies were inefficient?
Airports Council International (ACI), the reputed agency that carries out surveys to assess service standards at various airports across the world, last year declared Ahmedabad airport as the “most improved airport” in Asia-Pacific region. The Lucknow airport got the title of “best airport by region” among the airports handling 2-5 million passengers annually. The other four airports taken up for privatization also maintained global service standards.
The government argument of private companies bringing efficiency is hence misleading.
None of the six airports ever faced capacity deficit for want of funds. Thus, the second reason of privatization also does not stand.
The privatization move seems more aimed at presenting a “bold” image of the government. Many experts have been of the view that if there is so much investment needed in the airport sector, private investment be brought in the greenfield projects.
But government also knows it very well that investors are hardly interested in new projects. They want well-run airports to pocket profits from day one. The record in the airport sector amply shows it.
In the last 20 years, Bengal Aerotropolis Projects Ltd (BAPL)-run Durgapur airport in West Bengal is perhaps the only greenfield airport developed by a private party in true sense.
Instead of setting wrong target government should allow its airport agency AAI function in the most professional way. The agency is currently headless with a caretaker boss managing the show. Generally, government appoints Indian Administrative Service (IAS) officers as AAI Chairman who lack professional skills to run airport business. Since they are concerned more about their next posting and prefer running the business entity as government department, the AAI suffers.
The pertinent issue is therefore professionalizing the public sector airport agency. If five of the top six passenger ranked airports in the world by Skytrax are in public hands, why can’t AAI also vie for it. The International Air Transport Association (IATA) in its research has found that private sector airports are more expensive. Further, privatization did not see any gains in efficiency or levels of investment.
Experience in India is no different. Privatization of airports has resulted in cost for airlines going up and hence flying becoming expensive. The government must realize that airport privatization runs counter to its goal of making air travel affordable.
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