Mr V P Agrawal
 Chairman, Airports Authority of India (AAI)


Under the chairmanship of Mr V P Agrawal, the Airports Authority of India (AAI) has developed long-term focus, vision, planning and execution to become one of the best international airport managers in the world. Considering that air travel has shot up significantly, Indian airports can certainly do with such vision and professionalism. Here’s a Q and A with India Empire

Mr V.P. Agrawal has consistently shown long-term vision for the AAI

What are difficulties involved in following a PPP model?
There is no major difficulty involved in following PPP model. The PPP model in aviation and airport sector is a new concept and there are some misconceptions and mis-understandings among public and various agencies regarding some issues in the model being adopted at present in India. The main concern expressed till now is regarding the high cost of the airport project and corresponding increase in airport charges. It needs to be understood that creating a high class airport involves substantial investment in the project. In the initial stage, the costs seem to be higher but with the increase in the passenger and aircraft movement and improvement in economic conditions, burden on travelling passengers would surely come down.

How will the Government ensure viability of projects under PPP ?
The viability of a project depends on the capital cost and revenue generation from it. The Government while handing over the airport under PPP model ensures proper planning and master plan of the project so as to optimize the use of resources. A certain amount of land area has been earmarked for commercial development which will enhance the revenue generation of the airport operator. The airport operator has also been given power to award contract and enter into a joint venture on various aspects of the airport operation and revenue generation to increase the revenue and economize the cost. Moreover, the creation of large and better infra-structure would also lead to increase in passenger and aircraft movement and kick-start the economy of the country to bring in more revenue to the operators. AERA has also determined the airport tariff and charges keeping in mind the fair and equitable revenue to be generated by airport operators for investments made by them.

What are the ways in which airport developers would generate returns? Is it through real estate development or passenger fee ?
Though passenger fee is one of the source, airport developers would focus more on non-traffic revenue to generate maximum returns. Real estate development is one of the key focus for revenue maximization.

What are the measures Government should take to encourage airline operators to fly to non-metros? Are there any incentives involved?
AAI has proposed a number of incentives to attract airlines to its non-metro airports which include discount on landing and parking charges. The proposal has been submitted to the Ministry of Civil Aviation for consideration and approval. We are expecting a decision soon.

How would the Government ensure transparency in revenue collections in airports?
AAI has made regular updating of commercial manual which increases the transparency in handling of contracts. Further AAI has introduced e-tendering system for commercial contracts so that maximum transparency is brought out. AAI is also in the process of introducing e-auction.

Would airport developers have an option to increase capacity in case the traffic increases? How AAI would finance those projects?
To meet the future traffic demand, AAI would exercise the options such as distribution of the traffic evenly in 24 hours within existing available infrastructure, expansion of existing infrastructure wherever land is available, expansion of infrastructure after obtaining land from State Govt, revival of non-operational airports and development of new greenfield airport.
For viable airports, AAI would finance the above through internal resources along with grants from Government on case-by-case basis and for non-viable/green field airports, AAI would also approach the Government for grant.

Please tell us about AAl’s plan to modernize ground handling facility.
AAI has already engaged ground handling agencies through global tender in major airports in southern and northern region. AAI is also in the process of inviting tender for other regions i.e. western, eastern and north eastern regions. AAI is also inviting tender for joint venture ground handling agencies with state of art equipment for ensuring safety, eco-friendliness and passenger comfort.

What are the plans for Tier II and Tier III cities?
AAI will first assess the need for establishing and operationalizing of airstrips and airports considering the location. AAI will also prepare a Master Plan indicating additional land requirements for handing over to us free of cost and free from all encumbrances. AAI would also approach Government for grants for non-viable airports.

Please let us know about few future plans?
The future plans include increasing. air connectivity evenly throughout the country by reviving non-operational airports, new green field airport at Sriperumbudur, preparation of national register for all airstrips and airports in India.

According to you which issues should be resolved immediately? Is there any need for policy initiatives?
The issues are :-
1. Land and approach road connectivity to airports with state Government and union territories and defence authorities for civil enclave.
2. Undertake developmental works listed during the year as specified in 12th Five Year Plan.


January 2013

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