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Delhi and Mumbai gives a combined revenue of Rs 3370 crore to AAI

The success of these two airports and the venture comes when there is a growing skepticism over the success of the PPP model especially after the failure of the big ticket projects.

Published: 26th August 2016 06:05 PM  |   Last Updated: 26th August 2016 06:05 PM   |  A+A-

At a time when the PPP model in the transport sector is falling one after another, the Delhi and Mumbai airports have stood the test of time. Both these airports, executed under public-private-partnership, have given a combined revenue of Rs 3370 crore to Airport Authority of India (AAI) during the 2015-16 fiscal. Thus setting an example for AAI, rest of whose 90 odd airports across the country have being piling up an annual accumulated loss of over Rs 1200 crore.

The success of these two airports and the venture comes when there is a growing skepticism over the success of the PPP model especially after the failure of the big ticket projects. The legions are the ADAG-led Rs 5,800 crore airport express metro link in Delhi and the Gammon's Rs.1,400 crore container terminal project in Mumbai port, both of which have collapsed.

The other notable failures are the GMR's Rs 7,700 crore Kishan garh-Udaipur-Ahmedabad highway project, Emaar-MGF's Commonwealth Games Village project (where the government was forced to extend a bailout).

Railways too are facing difficulty in getting a partner to modernize and develop 400 stations and so also the highways authority. In 2014-15, for example, there was no bidder in as many as 16 PPP road projects.

The consistent performance of DIAL and MIAL, amid all the failures around, has given a big push to the Narendra Modi’s initiative to woo investment in the infrastructure sector.

Delhi International Airport Limited (DIAL) shares 45.99 per cent of its revenue with AAI and Mumbai International Airport Limited (MIAL) shares 38.7 per cent every year. According to the latest figures, DIAL has provided Rs 2304 crore to AAI and MIAL contributed Rs 1066 crore of its share to AAI during the 2015-16 fiscal, thus offsetting a significant portion of its losses. During 2014-15, AAI received 2907 crore from DIAL and MIAL and Rs 2684 crore from them in 2013-14.

 “AAI would have been in much deeper trouble had it not been for the revenues generated by DIAL and MIAL. The PPP model could be well taken into consideration for the future expansions,” said secretary general of private airport operators Satyan Nayar.

 Industry players feel the government should leverage on the success of the PPP model at least in the civil aviation industry which could see a huge growth in passenger  traffic volume to 550 million passengers by 2025.

Amber Dubey, partner and head (aerospace and defence) at global consultancy KPMG said the revenue earned from the Delhi and Mumbai airports could be channelized for developing no frills airports and give a boost to the regional connectivity programme of the government.  This, he said, is important because the private sector may not be interested in tier 2 and 3 cities given the long gestation period.

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