India is an emerging economy and has been showing better performance on its
Gross Domestic Product (GDP) since the last few years. The role of infrastructure is essential
to the economic growth of a country. In India, Infrastructural facilities are very poor and
the country has a low rank in infrastructure availability in the world. Airports are now
considered to be an important part of the transport infrastructure of the modern world and can
have greater impact on the urban structure and development. Airport infrastructure also
supports productive activities in the economy. Modern and full facility airports will help India
in her move towards becoming one of the most powerful economies in the world.
Huge investments are required to meet high growth in air travel demand. Major airports
like Mumbai and Delhi continue to face passenger traffic problems due to lack of
modern facilities. In 2007, Mumbai and Delhi airports handled 25.2 million and 23.3
million passengers respectively. These airports ranked the world's
55th and 61st busiest airports
in 2006. In India, passenger traffic is expected to grow at over 15% in the next five
years. It is expected to cross 145 million passengers per annum by 2010. Passenger traffic in
Delhi airport was 16.0 million during 2005-06, while it was 17.7 million in Mumbai airport
for the same period. Therefore, the government has felt the need for the development
of airport infrastructure in the country. Thus, vision 2010 proposes to create infrastructure to
handle 280 million passengers by 2010. However, the government and airport authorities are
not able to support more airport projects due to fund constraints. To strengthen the
economic growth, private participation is necessary for the development of infrastructure,
especially in airports. Hence the Government of India has opted for Private-Public Participation
(PPP) in airport development. Consequently, the Indian airport industry is going through
big changes. The government has constructed many regional airports through PPP.
Airport privatization is a global phenomenon. Many modern economies use
the privatization policy in airports for providing better facilities and services. The British
Airport Authority (BAA) has been adopting new management policies in airport funding
and development through privatization since 1987. Many developed economies have applied
this policy in airport infrastructure for modernization, but it is at an infant stage in the
Asian economies. In India too, we are just starting the process of private sector participation
in airport infrastructure. Earlier, all airports in the country were under the control of
Airport Authority of India (AAI), a government-owned organization. |