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The IUP Journal of Infrastructure :
Airport Privatization in India: Importance and Challenges
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The airport infrastructural facilities in India are very poor, and it ranks low in infrastructural availability in the world. All the major airports in the country face passenger traffic problem due to lack of modern facilities. The Government of India failed to make further investment in the airports due to fund constraints. Therefore, it has opted for private-public participation (PPP) to modernize the Indian airports. The Government's decision to privatize airports has invited enormous criticisms from airport workers. While the supporters argue that privatization is needed for better performance of country's economy, the airport workers argue that privatization is a dangerous decision for the self-reliant growth of civil aviation industry in India.

 
 
 

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.

 
 
 

Infrastructure Journal, Airport Privatization, Gross Domestic Product, Civil Aviation Industry, Economic Growth, Privatization Policy, Indian Construction Company, Privatization Process, International Airports, Domestic Airports, Modern Technology, Wireless Communication Systems, Mobile Management, Indian Tourism Development Corporation, Air Traffic Control System.