Left Menu
Development News Edition

GMR official says idea of privatising small airports not the correct approach

GMR official says idea of privatising small airports not the correct approach
Image Credit: Wikimedia

Privatising small airports would not be the right approach for the government as they need to be viable in terms of passenger size and growth projections, a senior official of GMR Airports said. "If the government wants to look at privatising small airports, in my view that is not the right approach. The right approach would be that they look at privatising more profitable airports, which now they are doing," Sidharath Kapur, executive director and board member, GMR Airports, said at CAPA India Airports Summit 2019 here.

The Central government has invited bids for privatisation of six airports - Lucknow, Jaipur, Ahmedabad, Guwahati, Mangaluru and Thirvananthapuram. These airports are currently under the control of the Airports Authority of India (AAI). "I think there is always a minimal size where an airport is viable (for privatisation)," Kapur said.

"The cost recovery models of these assets demand that there should be certain minimum traffic size. I guess 2.5 million to 3 million passengers (per year) is the ideal traffic size to make sense. And based on that, the growth coming makes sense of the large capex (capital expenditure) involved," he added. Kapur said GMR Airports - that currently manages Delhi and Hyderabad airports in India - does not mind looking at smaller assets. "But in all these assets we see if there is a huge growth potential. All the Indian assets, especially the smaller ones, and the ones which are currently under privatisation, the growth potential is huge," he added.

However, he added that "smaller airports do not make much sense from a private concessions point of view". He said the government should focus on building smaller aerodromes from the revenues of bigger airports that have been privatised.

"Delhi and Hyderabad constitute 85 per cent of the revenues of the Airports Authority. This can contribute to the kitty of the government and they can use this cash to construct airport infrastructure in underdeveloped and developing areas. Where there are no airports, they can build some airports, even if the traffic is around 100,000 passengers," he said. He said his company is not averse to greenfield airports either. "We continue to look at them. Our preference, as anyone's else preference, is brownfield assets that are running assets. The construction risk is not really there," he said.

"I would call the Indian greenfield assets as not truly greenfield. I would say they are more of a Whitefield because in most cases - except Goa which was an exception - the existing airport is shut down," he said. "Our Delhi and Hyderabad (airports) are for sure large assets...we will continue to look at international forays. We will continue to look at domestic assets because that is our home market," he stated.

(With inputs from agencies.)

Download The Devdiscourse News App for Latest News.



WEF 2020: Trump seems politically correct in pulling out from Paris Agreement

If the survey of the World Economic Forum WEF is believed, Trump seems to enjoy the confidence of his people in flaying climate intuitions and climate activists. His preference for economic development over environmental protection not only...

From home to healthcare, here are Robotic innovations transforming lives

Lovot is equipped with more than 50 sensors such as thermography, microphone array, obstacle detection, and touch sensor to generate motion and emotions in real-time....

Translating words to deeds: Achieving gender parity in access to financial resources

... ...

SDG13: How you can reduce global warming by changing your food habits

The mega narratives of various international organizations give the impression that fighting global warming is only a job of government agencies. However, the European Investment Bank EIB has designed a questionnaire which besides making th...


Latest News

Establishment of ACB to benefit people, enhance administrative efficiency in J-K: Reddy

Union Minister of State for Home G Kishan Reddy Thursday said that establishment of Anti-Corruption Bureau ACB in Jammu and Kashmir would directly benefit people and reduce the gulf between them and the government. The Union Minister was ad...

2 Bangladeshi rustlers shot dead by BSF

The Border Security Force personnel shot dead two Bangladeshi smugglers who were trying to steal cattle from a village in West Bengals Malda district on Thursday, a police officer said here. Another Bangladeshi smuggler was detained, Super...

Tanzanian home affairs minister fired over $453 mln contract

Tanzanian President John Magufuli fired his home affairs minister Kangi Lugola on Thursday, accusing him of mismanaging a 408 million euro 453 million fire department contract. Magufuli, who faces re-election for a second five-year term thi...

DoT orders no coercive action on defaulting Airtel, Voda-Idea; Pradhan says non-telcos not liable

On a day when the Supreme Court-mandated deadline for Bharti Airtel and Vodafone Idea to pay Rs 88,624 crore in past dues ended, the Department of Telecommunications DoT on Thursday decided not to take coercive action against defaulters dur...

Give Feedback