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Says won?t sell stake in Bengaluru
airport, interested in airports with 2-3 million passengers a year
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“Zurich Airport is planning further investments in Navi Mumbai and Goa. In general, we are interested in any airport with two to three million or more passengers a year,’’ company spokesperson Michael Stief said in an emailed response to Business Standard. Ending speculation the company would sell its five per cent stake in the GVK-controlled Bengaluru International Airport Limited, Steif said, “We do not plan to sell our stake
In 2009, Zurich Airport had sold
about 12 per cent in the Bangalore airport to the GVK group.
Last week, while chairing the
Cabinet’s infrastructure committee meeting, Prime Minister Manmohan Singh had
said new greenfield airport projects in Navi Mumbai, Goa and Kannur would be
awarded in FY13. Though government rules allow 100 per cent foreign direct
investment in airports, in practice, the level of foreign investment is lower
and is determined by the government authority implementing the project.
“Our main concern is the uncertainty
for investors in the market, especially the regulatory framework. We do have a
long-term commitment in India and are, therefore, interested and willing to
facilitate the regulator and exchange our best practices,’’ Zurich Airport
said.
The company is among the few foreign
airport developers to have invested in India, the others being Fraport,
Malaysian Airports (it has invested in the Delhi and the Hyderabad airports)
and Airport Company of South Africa (with investment in the Mumbai Airport).
On Friday, Fraport had announced it
was exiting India, owing to lack of opportunities and the slow pace of reforms.
“We expected opportunities (in airport development) to come up, but that did
not happen. This did not justify running an office in India,’’ said Fraport
India’s managing director Ansgar Sickert.
Singapore’s Changi Airport had also
decided against investing in GVK group’s airport division because of regulatory
uncertainty, according to media reports. Changi Airport did not respond to
queries by Business Standard.
Amrit Pandurangi, senior director,
Deloitte Touche Tohmatsu, says, “International investors are not coming to
India because there are no opportunities, not because of regulatory framework
issues. There are no clear-cut time tables on the Navi Mumbai or Goa airports.
Foreign investors would look for developing airports that can handle five
million passengers or more. No one wants to invest in small airports that can
handle half a million.”
He says another issue investors are
concerned about is the government’s land acquisition Bill.
“Compensation of land under the
policy would be so high that the airport would have to depend on the government
for viability gap funding or subsidy.’’ Another concern for investors is a
perception that the government retracted its commitment to private airport
developers such as GMR and GVK on rate models at the airports, he adds.
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