Zurich Airport eyes Navi Mumbai, Goa

Even as German airport developer Fraport AG is shutting its operations in India, deciding to sell its small stake in the Delhi airport, its competitor in Europe, Zurich Airport, is bullish on Asia's third-largest economy. The company is eying investments in the greenfield international airport projects at Navi Mumbai and Goa.

"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.''

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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.

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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.

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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."

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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.