Reuters Blogs

India: A billion aspirations

Perspectives on South Asian politics

October 23rd, 2008

India’s dream of ‘world-class’ airports and why I can’t afford it

Posted by: David Lalmalsawma

After a two-hour flight sitting a few feet away from four boisterous children who made enough noise to put a marching band to shame, emerging at Hyderabad’s swanky new airport for my first visit to the city proved very soothing for my frayed nerves.

The spacious terminal building, high glass walls, and the view, as you step outside, of palm trees and people leisurely posing for photographs in front of water fountains made me recall chaotic scenes back at Delhi’s airport, as I allowed myself a wry grin.

planeq.jpgMy admiration for what the aviation minister has described as India’s first truly “world-class” airport vaporized when on my return trip, a smiling attendant approached me at the terminal and directed me to a counter that collected 375 rupees from every passenger flying out of the city — courtesy a recently introduced toll called UDF or User Development Fee (International travellers were asked to shell out a thousand rupees).

A UDF is a toll collected by private airport developers to finance in part their project costs, provisions for which were introduced by the government recently with the advent of private players’ participation in development of the country’s airports, although there is no clear policy on how much a developer can charge passengers.

The argumentative Indian that I was, I protested that it seemed absurd to charge passengers so much every time they fly out of the airport, where the most they do is stand in queue to get their boarding passes, maybe use the toilet once and perhaps have a bite at a food joint, which by the way pays money to the airport authorities for operating on the premises.

Besides, I argued, we already paid for our air tickets, which are supposed to include all taxes and service charges. In any case, fees in other areas like road toll or parking charges on vehicles usually amount to double digit numbers, not in the hundreds.

Imagine my dismay when on my return to Delhi, I found out that DIAL, which is developing the capital’s airport, was asking the government’s permission to introduce a similar fee. On further research, I discovered that Bangalore airport already charges UDF and Mumbai airport authorities have also proposed charging the same.

plane.jpgAnd with plans to develop 35 more airports in the country through the public-private partnership model, all major airports in the country could soon be putting up requests for charging UDF on passengers to let them have a “world-class” experience at their terminals.

Not to argue about the larger economics of the costs and strains of building airports, but is directly charging a few hundred rupees from passengers every time they come to the airport fair or even commercially sound in the long term?

For thousands of citizens like me who can claim to see the inside of an airplane only due to the entry of budget airliners, paying so much just to catch our plane doesn’t make much sense (trains are starting to look inviting again).

Yes, we want big and beautiful airports like everyone else, but not by being forced into directly contributing not once but every time we visit the place.

Also, in these times of economic turmoil when consumers are increasingly getting thrifty, levying such a fee could lead to decreasing air passenger traffic with the lower middle class preferring to go, especially for short distances, by road or rail route.

This would directly affect airliners who would be forced to reduce flights, in turn decreasing the income of the airport operator because of decreased landing and parking fees of planes and service charges.

But as I said before, forget about the larger economics or the high-class jet-setters who would keep on flying anyway, is levying a UDF fair on budget travellers like you and I?

June 17th, 2008

Searching for a brighter future for India

Posted by: Simon Denyer

Sometimes journalists are accused of only writing about bad news, so I wanted to share with you a wonderful day I had last Friday travelling to Hyderabad.

For a change, even the journey was smooth. I went on a brand-new plane with one of India’s new airlines — not only was the service good, but it actually left exactly on time, and arrived early. A bit of a rarity in my recent experience of India’s congested airports and airspace.

And when I arrived, what an airport. The Rajiv Gandhi International Airport, which was opened in March, is truly state-of-the-art, incredibly clean, very spacious and stylish. A public-private partnership, it would grace any country in the world, and clearly had been built with room for Hyderabad to expand. Again, a pleasant change from Delhi’s chaos, where the airport is several steps behind demand.The private sector won’t solve all of India’s problems, but here were a couple of examples of liberalisation at its best, of reforms which have unleashed the country’s vast economic potential.

Me with the Googlers in HyderabadMy destination was the new Google office and India headquarters, where I was giving a talk on my life as a foreign correspondent, and especially the last six years in South Asia. I also gave a similar talk to a smaller crowd at Indian School of Business, recently ranked at number 20 in the Financial Times list of the top business schools around the world.

The people I met at both places were enthusiastic, intelligent and dynamic. They asked plenty of thoughtful, probing questions about the media, and were generally fun to hang out with. The energy at Google was pretty contagious.

It’s the sort of day which made me genuinely optimistic about India’s potential. If there is a downside, though, it is that very little of this energy and dynamism seems to be going towards solving India’s continuing problems, of poverty and heathcare and education.

The young seem pretty cynical about politics, and probably have good reason to be. Not that many of them could break into politics even if they wanted to, without the right family or vote bank behind them.

Still, let’s just hope that India continues to harness the energy and dynamism of its young people. I guess quite a few of the Googlers will go on to do MBAs, and with a bit of luck a few will stay and use their expertise in India, rather than go abroad.