Name : JANVI. D REG NO:G1811015 TOPIC:Public Private Partnership In Indian Airports. SUBJECT:Priciples Of Airline And Airport Management. INSTITUTE: Agragami Institute Of Management

1. PUBLIC PRIVATE
PARTNERSHIP IN
INDIAN AIRPORTS

2. INTRODUCTION
Airport : Kempegowda International Airport
– Bangalore
Bangalore International Airport Limited (BIAL) designed,
built, owns and operates (DBOO) the Kempegowda
International Airport. The concession agreement between
the Government of India and BIAL was signed in July 2004
and the airport became operational in May 2008..A foreign
consortium holds a 74% stake in BIAL which consists of the
following private promotors: GVK Group India (43%),
Siemens Project Ventures GmbH (26%) and Flughafen
Zurich AG Ltd. (5%). The remaining 26% are owned by
State promoters; AAI as well as the Karnataka State
Industrial Investment & Development Corporation Limited
(KSIIDC) hold each 13%.Bangalore International Airport
Limited is granted the exclusive right to manage the airport
for a period of 30 years (option for extension), starting from
its opening date, and to carry out the development,
design,financing, construction and operation. Furthermore,
BIAL may perform any activity related to the handling.of
aircraft, passengers, baggage and cargo at the airport. It may
also grant service providers to carry out such activities.

3. PUBLIC PRIVATE PARTNERSHIP (PPP)
The public–private partnership (PPP or 3P) is a commercial legal relationship
defined by the Government of India in 2011 as “an arrangement between a
government / statutory entity / government owned entity on one side and a
private sector entity on the other, for the provision of public assets and/or public
services, through investments being made and/or management being undertaken
by the private sector entity, for a specified period of time, where there is well
defined allocation of risk between the private sector and the public entity and the
private entity receives performance linked payments that conform (or are
benchmarked) to specified and pre-determined performance standards,
measurable by the public entity or its representative.

4. PUBLIC-PRIVATE PARTNERSHIP BENEFITS
AND DISADVANTAGES
BENEFITS
 The greater efficiency of PPPs reduces government budgets and
budget deficits.
 They provide better infrastructure solutions than an initiative
that is wholly public or wholly private.
 A public-private partnership’s return on investment, or ROI,
might be greater than projects with traditional, all-private or all-
government fulfillment.
 Public-private partnerships that reduce costs potentially can
lead to lower taxes.

5.  Profits of the projects can vary depending on the assumed risk,
the level of competition, and the complexity and scope of the
project
 Every public-private partnership involves risks for the private
participant, who reasonably expects to be compensated for
accepting those risks. This can increase government costs.
 The limited number of private participants that are big enough to
take these tasks on might limit the competitiveness required for
cost-effective partnering.
DISADVANTAGES

6. CASE STUDY OF BANGALORE INTERNATIONAL
AIRPORT
 Case Study –Bangalore International Airport
Limited (BIAL)
BIAL airport is located 34km from the Bangalore
city. It is spread over a land area of 3900 Acre. The
airport is having an annual passenger capacity of
12.0 million and cargo handling capacity of 35000
tonnes. The total project cost for phase-1 was
$495.6 million. The airport offers non aeronautical
services like hotels, food court, tax free shops,
shopping mall etc besides regular aeronautical
services. The 1st phase of airport becomes
operational in May-2009 [30, 39].The Phase-II of
BIAL includes development of one more terminal
and another runway. The estimated cost of Phase-II
is about Rs $500 million. The work of phase-II is
under progress (year 2013).

7. 1.PROJECT STRUCTURE
The Bangalore international airport was developed under Built Own Operate Transfer
(BOOT) model. The concession period of the airport has been kept 30 years which is
extendable up to 60 years. The partnership structure along with roles of the project
stakeholders .
BIAL is a Public Limited Company promoted by Siemens Project Ventures.
Mumbai Airport Developers Private Limited (a wholly owned subsidiary of GVK Power &
Infrastructure Limited) (Equity: 29%), Flughafen Zurich (Equity: 5%) and two public
agency(Equity: 26%). The public agencies include Karnataka State Industrial Investment &
Development Corporation Limited (13%) and Airports Authority of India (13%). Private
promoters hold 74% stake in BIAL while the state holds the remaining 26% [30, 39].

8. 2.PROJECT OPERATION
The operation of BIA is to be carried out as per the guidelines of IATA. The airport is
supposed to maintain operational performance of at least 3.5 point on 5-point IATA scales.
Non achievement of service level agreement (SLA) is treated as default event. All such
events attract penalties as per concession agreement .
The concessionaire may be debarred from continuance in case of service level default. But
the services of the airport cannot be stopped in the public interest. The lender of the project
shall be given 1st chance to redress the grievances. Otherwise public authority shall take over
the operation of the airport. Such kind of provision in PPP is referred as substitution

9. INDIRA GANDHI DELHI INTERNATIONAL
AIRPORT

10. CASE STUDY OF DIAL
Delhi’s Indira Gandhi International Airport
(DEL) is a symbol of India’s burgeoning
progress as an economic and travel center,
connecting to 127 destinations worldwide
and serving as a hub for many major
airlines, including Air India, Vistara, IndiGo
and SpiceJet. A recent report published by
the International Civil Aviation Organization
(ICAO) listed Indira Gandhi International.
Airport (IGIA) as the 12th busiest airport
worldwide in November 2016,1
coinciding with the airport crossing the 50 million
passenger mark – the highest ever in the
country. IGIA also enjoys international
recognition as the world’s second best
airport in the “largest airport” category
(passenger capacity of over 40 million
passengers per annum) as recognized
by the prestigious Airports Council
International’s (ACI) Airport Service Quality 2016 rankings

12. THANK YOU
JANVI. D
BBA AVIATION (Mngt)
REG NO:G1811015