Challenges ahead for BIA

Challenges ahead for BIA
BY R. JAYAPRAKASH
BENGALURU


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On February 1st, 2009, there will be a change of guard at the Bengaluru International Airport Limited (BIAL). After seven years, Chief Executive Officer of BIAL, Albert Brunner, will make way for current Chief Operating Officer, Marcel Hungerbühler. Deccan Chronicle caught up with both the officers in an interview where they shared their experiences, the highs and lows and future plans. Albert Brunner, outgoing CEO What was your biggest challenge while executing the BIA? My only challenge was to execute the project and in that there were many challenges. Concession agreement was non-existent in India. When we started construction, we had to expand it by over 70 per cent. Building the organisation was a tough proposition. Opening the airport was a big challenge. Once the initial glitches were overcome, we did it in record time. When I came to India for the first time I was put back on the same flight back as I didn’t have a visa! Since then I have come a long way. It’s said you maneouvered to include the 150-km restriction clause only later to pave way for HAL airport re-opening? We have an agreement with GoI and everything is trans parent. I am not aware if this clause was brought in later. I think it was always there. I doubt that somebody else will come up in this range, it’s a huge investment and it is difficult to be viable in the first few years. It will take 10 to 15 years till you are on sound ground so it is not viable to have two airports within this range. No one would have come forward if this clause was not mentioned. The joint house committee (JHC) members have alleged that you have favoured fellow consortiums bag contract and inflated prices of purchased items? We have done everything in a transparent way. Government, when it floated tenders called for experts in the field and it was clear from the very beginning that con sortiums will also bag contracts. There would be conflict of interest and to keep a check on it, all the contracts were vetted by independent engineers. Marcel Hungerbühler, incoming CEO There are reports that BIAL has put on hold expansion plans for another three years? We are not running to full capacity. We haven’t even reached half capacity. Initially when we planned the airport, we aimed at handling 11.8 million passengers. Going by the rate we will see only 8 million at the end of the year.
The economic slowdown has hit the airline industry and we are witnessing a slump of 25 percent. So we will study the running capacity and then plan how to expand. All the board members say that BIA has to be expanded. We are planning an interim terminal building, third terminal, second runway, expansion of parking space of the apron, additional parking facility. But the expansion will be need based only. In November we dropped the expansion work as the BIA’s revenue was hit as there was no cash flow. Absence of UDF collection hurt us badly, but now things are getting better. Expansion will depend on demand for such facilities. You are asking for Rs 675 while Hyderabad Airport, which is superior, collects only Rs 350? The UDF requested by GMR was between Rs 600 and Rs 700 and the ministry of civil aviation sanctioned Rs 350. We need the UDF as only then we can plan for expansions. GMR looks bigger because the traffic is thin but yes they are slightly bigger. But BIA is not inferior. The government is debating over a High Speed Rail Link. What is your take? We need metro rail link to North Bengaluru more than a HSRL. This area will see development in the coming years. We are planning Airport City, KSIIDC is planning a business park. So a rail link is must. With HSRL, you are restricting the user to air passengers where as the need is more than just them.