Experts warn of grave risks of unbridled growth and privatisation
An independent regulator will have to spell out clear terms for staffing in the new airports, especially the privately developed ones.
— PHOTO: PAUL NORONHA
AGOG WITH ACTIVITY: The world's largest civilian aircraft, the double-decker A380 capable of carrying up to 850 passengers, touched down at the Mumbai airport for the first time on May 8.
THE AVIATION scenario in India seems to be on the boil. Partial privatisation of airports has taken place; after a phase of unabated expansion and birth of new private airlines, there could be a period of consolidation; new greenfield airports may be opened to traffic in the first half of 2008; most airlines will start acquiring new aircraft from late this year and this should climax in the acquisition of the new Airbus A 380 by Kingfisher in 2010. From a distance, it looks like an aircraft getting full throttle on the runway, readying for take off. But aviation experts sound a big note of caution — if the growth and expansion turn out to be unbridled, there could be turbulent skies ahead.
A new dimension has been added by the reported official-level discussion on permitting "merchant airports'' to be built entirely by the private sector, with possible infusion of 100 per cent foreign direct investment.
Basically, what the aviation experts, especially those running the airports, want is a sound, effective, and powerful regulator before the scene explodes. Right now, the Airports Authority of India (AAI) takes charge of the airports, while the Directorate General of Civil Aviation (DGCA) functions as the regulator for the airlines and the technical aspects of aviation, including air and passenger safety. The question that has arisen now seems to be: "Are they effective enough for the future or does India need a more efficient and powerful regulator?''
This question stems from the fact that the AAI is also a player in the sense it is both constructing airports on its own and partnering the private sector in the development of new airports or terminals. Though private consortia have taken up the development of new airports in Delhi and Mumbai, the AAI comes very much into the picture. Similarly, the State governments of Andhra Pradesh and Karnataka have a stake in the construction of greenfield airports in Hyderabad and Bangalore, along with the private sector and the AAI. When the existing regulator takes to multi-tasking, aviation industry sources wonder if the time has not come to create an independent and effective regulatory framework.
Recently, the International Air Transport Association (IATA) Director General, Giovanni Bisignani, was quoted as saying: "Let us be careful about the role of private parties. The airport regulator needs to be independent and have a strong mandate.'' He cautioned India about the `grave risks' that lie ahead in its rapid expansion, especially in the context of the privatisation of airports. A very tough regulator became imperative to ensure proper functioning of private airports.
Such a warning may be nothing new in the Indian context. The Left parties as well as the trade unions at the airports and airlines have time and again protested against the privatisation of airports as also the airlines. From the government's side, the argument seems to be that involvement of the private sector has become essential now when huge investments are imperative for the development of airports to meet the burgeoning traffic and provide world-class facilities at these airports. In addition to the four metropolitan cities of Delhi, Mumbai, Kolkata and Chennai, and the two greenfield airports in Hyderabad and Bangalore, which will involve private players as well, the AAI itself has embarked on an ambitious programme to modernise and expand 35 non-metro airports. As there is a limit to the funding for such a major development in the aviation industry, participation of the private sector cannot be wished away.
Airport authorities and the technical engineers involved in the management of the airports insist that there is already an `unbridled growth in traffic.' They warn that the Air Traffic Control in most airports may not be able to cope with the exponential growth in air traffic movement. Management of the skies assumes significance, especially during the congested peak hours, when aircraft take off or land almost every minute. Regulating the landings and take offs, ensuring safety of the skies during these operations, and the management of parking berths and bays at airports have all become tough.
An independent regulator will have to spell out clear terms for staffing in the new airports, especially the privately developed ones. In their anxiety to recover costs, and step up returns on investment, the private developers could strain the systems, outsource key functions, and also over charge the users. The regulator needs to carefully monitor such developments and come down on profiteering, even while keeping a watch on safety and security aspects. Any violations have to be dealt with sternly, and if the private parties fail to fulfil their commitments under any agreement, there must be a provision to cancel or withdraw the agreement itself. It remains to be seen if the Civil Aviation Ministry and its new policy deal with these issues.
V. JAYANTH
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