Foreign airports fail to bring value in their Indian JVs, says AAI chief

Airport Authority of India chairman V P Agrawal on Wednesday said foreign airport developers had failed to bring value and expertise in  their Indian joint venture airports.

Agrawal's comments at a panel discussion at the Centre for Asia Pacific Aviation's summit in Mumbai sparked off a war of words with Fraport and Zurich Airport denying the AAI chairman's assertions.

Foreign airports have invested in airport projects at New Delhi, Mumbai, Hyderabad and Bangalore. Fraport holds 10% stake in Delhi and is considering an exit next year. Zurich holds five percent in Bangalore airport after selling off its 12% stake to GVK group last year. Foreign companies are allowed to invest upto 49% in Indian airport projects.

Agarwal said  foreign airports were allowed to invest in  Mumbai and Delhi airports in 2005 in order to bring value to projects and use their experience in design and construction. He said if the foreign airports desired managerial control in Indian airports the companies should commit more funds. 

" (Foreign) airport operators have seen it (equity in Indian airports) as an investment venture and at a proper time made exit...so we have had a bad experience,'' Agrawal remarked.

" What  we are looking at is to bring value in operational efficiency, safety and world class norms,'' he said.

Reacting to the criticism, Christian Sigg, head of international business of Zurich Airport said "We are used to be silent partners and we are not the ones who will put up advertisements.''
 
"We still have four persons on site in Bangalore and had eight persons on site during construction and opening of airport. We deliver mandates every single day and have delivered a lot of know how.''

Kai Zobel, VP, Global Investments of Fraport too dismissed the charges and said the company does not act like a private equity investor." Our philosophy  is to be committed for  long term and u will look at our shares in other airports we are working for  long term. We would never act a pure investor and always like to bring expertise to other countries.''