Description
The PPT describing about Aviation sector, Bidding details, project details, financial model and risks associated with Mumbai International Airport.
Mumbai International Airport Private Limited
Agenda
? Overview
of Airports ? Airports Sector in India ? Bidding Process Details ? Project Details – MIAL ? Financial Model ? Project Risks ? References
An Attractive Asset Class
Opportunity High Barriers to Entry Limited Competition Commercial Development Reason Capital Intensive Passengers in Catchment Area Retail, Car Park, Land Bank
Air Traffic Growth
Projected sustainable growth
GROWTH DRIVERS ?Growing Economy ?Increased Tourism ?Penetration of Low Cost Carriers
Regulatory Setup
Source: MoCA Annual Report 2008-09
Airports Authority of India (AAI)
Established under the AAI Act, 1994 ? Creation, upgradation, maintenance & management of civil aviation infrastructure ? 126 Airports (11 International)
?
KEY OBJECTIVES ? Expansion & Strengthening Operational areas (Runways, Taxiways) & Ground based landing and movement control ? Design, Development & management of Passenger & Cargo Terminals ? Provision of Passenger facilities & Information systems
Airport Economic Regulatory Authority (AERA) of India
Established in May 2009 ? To eliminate the dual role of AAI as a service provider & regulator of airports
?
KEY OBJECTIVES
• Regulate aeronautical services tariff for major airports* • Determine Development Fees • Determine Passenger Service Fees • Monitoring Performance standards (quality, reliability) Authority Purview: *Airports with Annual Pax of 1.5 million or any other airport notified by central govt Levied Tariffs to be reviewed every 5 years
Initiatives so far
MODERNIZATION of existing Metro Airports Details
Delhi
- GMR consortium – 74% - AAI – 26% Revenue Share to AAI – 45.9%
- GVK consortium – 74% - AAI – 26% Revenue Share to AAI – 38.7% Will be modernized by AAI Will be modernized by AAI -Developing Regional Hubs Two Pronged Approach by AAI - Airside Infrastructure by AAI - City side development by Private Sector
Mumbai
Chennai Kolkata Development of 35 Non Metro Airports
Initiatives so far
GREENFIELD Airports through PPP Route Details
Hyderabad
Completed in March 2008 - GMR Consortium – 74% - Govt of Andhra Pradesh & AAI – 26%
Completed in April 2008 - L&T, Siemens (Germany), Unique Zurich (Switzerland) – 74% - Karnataka Govt & AAI – 26% Navi Mumbai, Pune, Goa, Kannur (Kerela), Halwara (Punjab)
Bangalore
New Proposals
Airport Performance
Demand for International Gateways
Source: AAI Traffic News Report August 2009
Project Background and Need
? ?
?
? ?
Modernization of airports was initially considered in 1996. Task force set up in 1999 recommended outsourced management Liberalization of air travel services in recent past lead to entry of low cost carriers and caused a sharp increase in air traffic In 2003-04, Mumbai airport handled 13.3 million passengers of which 60% were domestic and 326 thousand tons of cargo of which 28% was domestic Analysts estimate 10-20% growth in traffic in the next 5-10 years Airports in India are inadequate to handle increase in traffic
Comparison of AAI Airports
•A high percentage of aeronautical revenue. •Very low revenue per employee. •Low Revenue per passenger.
Suggestions by Naresh Chandra Committee
?
Separate Economic Regulator – Active regulation of sector along with checking malpractices. (e. g – TRAI)
?
Reduction of Airport Charges – Mumbai is 49th most expensive airport but nowhere close to Hong Kong and other well developed airports. Contribution from non-aeronautical revenues to be enhanced.
Range of Private Sector Options
Public • • • • • Supply and Civil works contracts Technical Assistance Contracts Sub-Contracting Management Contracts (Inefficiency and Capital Problems)
PPP
• Leasing • BOT and concessions • (Control, Political Problem and Agency Problem)
Private
• BOO • Divesture by License • (Control, Conflict of Interest, Regulation and Safety Concerns)
Proposed Development Targets
?
Key Facilities at the Revamped CSIA
Facilities Parking stands for aircraft Boarding Bridges Car Parking Check-in counters Proposed 106 66 12000 339 Existing 84 18 36000 182
CSIA will be able to cater to passenger traffic of 40 million passengers per year. ? Handle cargo traffic of 1 million tonnes per year.
?
Developments under Master Plan
?
11 Rapid Exit Taxiways and 4 Parallel Taxiways to increase the operational efficiency of the cross runway system An integrated common user terminal catering to both domestic and international passengers designed by leading International Architects – Skidmore, Owings & Merrill (SOM)
?
?
A six-lane Elevated Road will be built in co-ordination with MMRDA, providing direct connectivity to New CSIA Terminal at Sahar, from Western Express Highway for quick access
Construction of New ATC Tower Plan and develop new international and domestic cargo facilities and utilization of Terminal-I areas
? ?
Developments under Master Plan (contd…)
? ?
Expansion of the airport operational area Major modification to the drainage system to improve operating conditions, especially during monsoon month Implementation of a model Slum Rehabilitation scheme in line with the State Government Policy along with Housing Development and Infrastructure Limited (HDIL) Environmental Up gradation through use of unique, integrated Architectural & Urban Design image, large green areas, indoor & outdoor Landscaped Areas, Rainwater Harvesting and Energy Conservation MIAL proposes to develop CSIA as a destination for Mumbai city by creating city-side infrastructure for Hotels, Business Centres, Retails, Entertainment and Leisure
?
?
?
Events
? ?
?
? ?
June 2003: AAI approves modernization of Delhi and Mumbai Airports September 2003: Cabinet approves restructuring via JV route with 74% equity by private consortium and 26% by AAI December 2003: EGoM approves appointment of ABN Amro as financial consultants September 2005: Bids received March 2006: GOI handed Mumbai airport to GVK consortium
Bid Details
? ?
4 Phase Bid Evaluation Process Phase I: Consideration of mandatory requirements
?
Phase II: Consideration of financial commitment Phase III: Minimum Benchmark of 80% required on two technical pre-qualification criteria
? Management Capability, Commitment and Value Add
?
Contd..
?
Phase IV: Assessment of financial consideration ? Based on percentage of gross revenue (aeronautical and non-aeronautical) that would be shared with government ? Bidder with highest revenue share would be successful bidder
Transaction Structure
Transaction Documents
?
Operation Management and Development Agreement (OMDA)
? AAI granting the right to operate, maintain, design, construct, upgrade, finance and manage airport to JVC ? Land leased for 30 years and in case of renewal lease renewed for additional period of 30 years ? AAI, GOI and PSUs to hold 26% and private participants 74% ? Foreign shareholding restricted to 49%
?
Lease Deed (LD)
?
Shareholders Agreement (SHA)
Contd..
?
State Government Support Agreement (SGSA)
? Agreement between respective state governments and JVC ? State Government to provide support to company and AAI on matters relating to encroachments, additional land for airport development, surface access, safety and security
?
Substitution Agreement (SA)
Bid Submission
?
List of Bidders
? ? ? ? ? ? Reliance – ASA GMR – Fraport DS Construction – Munich Sterlite – Macquaire – ADP Essel – TAV GVK – ACSA
Final Result
?
Mumbai Airport awarded to GVK ACSA
GVK Consortium
Contd..
ACSA (Airports Company South Africa) : Formed in 1993 and operates South Africa’s ten principal airports Handles around 200,000 aircraft landings and 23 Mn passengers annually ? Bidvest: Founded in 1988 and operates as services, trading and distribution
?
Contd..
?
AAI (Airports Authority of India): Formed in the year 1988 by merging International Airports Authority of India and National Airports Authority Manages 126 airports in India
Passenger Growth Forecast
50 40 30
20
10 0
International Domestic
• • • •
Peak Passenger Capacity would be attained in 2019 Due to recession there was a passenger de-growth in FY09 Domestic : International passenger ratio assumed to be 65:35 Passenger traffic growing at 12% annually prior to 2009 - Domestic passenger traffic growing at 14% - International passenger traffic growing at 9%
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37
Air Traffic Movement Growth Forecast
600 500 400 300 200 100 0
International Domestic FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37
• Peak Air traffic movement would be attained in the year 2025 • The maximum ATM would be 525,000 (inclusive of both domestic international) • The ATM would grow at 5.22% CAGR over FY10-FY25 • Domestic : International ATM ratio assumed to be 72:28
Cargo Growth Forecast
1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 International Domestic
• The current cargo capacity is 530,000 tonnes which would be increased to 1,000,000 tonnes by 2025 • The cargo capacity would grow at 4.04% CAGR over FY10 – FY25 • Domestic : International cargo ratio assumed to be 29:71
Revenue Sources
Landing Charges (27%) Passenger Service Fees (9%) Aircraft Parking Charges (1.5%) X-Ray Charges (0.5%) Oil Throughput (8.1%) Revenue NonAeronautical (45%) Food and Business (4.5%) Advertisement (3.2%) Aeronautical (38%)
Cargo (17%)
Duty Free (8.6%) Ground Handling ( 5.9%)
Lease Revenue
Others (14.9%)
Aeronautical Revenue
The landing charges are based on the weight of the aircraft. It is different for domestic and international flights. The PSF is split into two components viz. PSF Security and PSF Facilitation. Different PSF is levied on rupee and dollar tariffs
Passenger Service Fees
Landing Charges
Aircraft Parking Charges
X-Ray Charges
Housing charges levied in case the aircraft after landing is parked in a hangar or at a contact stand. The charges levied are linked to the weight
X-ray charges for domestic passenger aircrafts are based on seat capacity of aircraft. It is different for domestic and international flights.
Non-Aeronautical Revenue
Oil Throughp ut Food & Business
Duty Free
NonAeronautical Revenue
Advertiseme nt
Ground Handling
Others
Cargo Charges
Costs Involved
Annual Fees
Power & Fuel, Operations Support Cost, Salaries & Bonus, Contract Services & Other Overheads Paid to AAI @ 38.9% of the total revenue
Operating & Administration
Considering 10% Salvage value. Assets depreciated using SLM considering 15 year useful life
Depreciation
215 bps above 3 year GSec
Interest
Capital Structure
Debt : Equity : 72 % : 28 % Government Equity : Private Equity : 26 % : 74 % Debt Funding Details Investors IDBI led consortium comprising of Andhra Bank, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, India Infrastructure Finance Company Ltd. (IIFC), Indian Bank, IDBI, Oriental Bank of Commerce, Punjab National Bank, Syndicate Bank, United Bank of India, UTI Bank Ltd. and Vijaya Bank 42000 Million 17 years 7 years
Amount Tenor Moratorium
Interest Rate
The loan covers a seven-year drawl period. MIAL has procured an interest rate, which is benchmarked to three years Government Security plus a margin of 215 basis points. The loan will be repaid in 120 monthly payments.
Capital Structure
Equity Funding Investors ACSA Global Limited (Airports Company South Africa Limited) GVK Airport Holdings Pvt. Ltd. (GVK Industries Limited) Bid Services Division (Mauritius) Ltd. (The Bidvest Group Limited) Airports Authority of India (AAI) Country Mauritius % Holding 10.0 Amount (Millions Rs.) 1600
India
37.0
5920
Mauritius
27.0
4320
India
26.0
4160
Total
12000
Risk Distribution
Risk PreConstruction Description AAI shall obtain approval and authorization from GoI to make lease of the Airport and grant relevant Clearances requisite for operation and management of the Airport by the JVC To be borne by the JVC Transfer of Rights in Airport and Transition Phase shall be performed at its own risk and cost as if JVC was an original party to such contracts and agreements. AAI shall provide operational support to the JVC through the General Employees at the estimated annual Operation Support Cost. To be borne by the JVC To be borne by the JVC
Construction Operational
Commercial Financial
Risk Distribution
Risk Description
Political
Step-in Rights of AAI: In the event of an emergency, AAI shall have the right to temporarily assume control (upto 3 months) of the Airport in place of the JVC as per provisions of the State Support Agreement. Waiver of Immunity: The execution, delivery and performance by AAI of the Agreement constitute private and commercial acts rather than public or governmental acts and accordingly, no immunity from proceedings brought against it or its assets in relation to this Agreement shall be claimed. In the event that JVC becomes qualified to avail the benefits available under Section 10(23)(g) and Section 80 IA of the Indian Income Tax Act, 1961, as a result of which, the JVC incurs an increase in net after tax return or other financial gain or benefit, the JVC shall notify AAI and pay to AAI an amount that would put the JVC in the same financial position it would have, had the Benefits not
Regulatory
Other Risks faced by the project
Lower returns on high capex base ? MIAL’s business model could face the risk of lower returns given that a total of Rs 98bn will be spent to raise passenger capacity from 25mn to 40mn. ? However, the airport capacity can be stretched to 125% of the targeted capacity. This would effectively utilise non-aero revenue potential, which the management expects to grow at a 20% CAGR.
Other Risks faced by the project
Saturation in the long term owing to expansion constraints ? MIAL will reach its stipulated capacity by FY17-FY18 and its maximum possible capacity of 50mn by FY22-FY23. Given that there are space constraints precluding further expansion at MIAL, it could face saturation in growth in the long-term unless innovative means to expand capacity are adopted or the company wins the Navi Mumbai airport project bid.
Other Risks faced by the project
Execution risk ? HDIL is tasked with the rehabilitation of slum dwellers occupying airport land. The first phase is to be completed by January ’10, with 20,000 slum unit dwellers to be relocated. ? This is one-fourth of the estimated 80,000-plus units, though the government pegs the figure at closer to 65,000 units. Delays in land clearance can impact execution.
Financial Model
References
?
? ? ?
?
Airport Privatization in India: Lessons from Bidding Process in Delhi and Mumbai by Rekha Jain, G. Raghuram and Rachna Gangwar GVK Power and Infrastructure: Religare Hichens Harrison Report Airports Authority of India: http://www.airportsindia.org.in/AAI/main.jsp Operations, Management and Development Agreement between Airports Authority of India and Mumbai International Airport Private Limited for Mumbai Airport Chhatrapati Shivaji International Airport: http://www.airportsindia.org.in/AAI/main.jsp
Thank You!!!
doc_660391503.pptx
The PPT describing about Aviation sector, Bidding details, project details, financial model and risks associated with Mumbai International Airport.
Mumbai International Airport Private Limited
Agenda
? Overview
of Airports ? Airports Sector in India ? Bidding Process Details ? Project Details – MIAL ? Financial Model ? Project Risks ? References
An Attractive Asset Class
Opportunity High Barriers to Entry Limited Competition Commercial Development Reason Capital Intensive Passengers in Catchment Area Retail, Car Park, Land Bank
Air Traffic Growth
Projected sustainable growth
GROWTH DRIVERS ?Growing Economy ?Increased Tourism ?Penetration of Low Cost Carriers
Regulatory Setup
Source: MoCA Annual Report 2008-09
Airports Authority of India (AAI)
Established under the AAI Act, 1994 ? Creation, upgradation, maintenance & management of civil aviation infrastructure ? 126 Airports (11 International)
?
KEY OBJECTIVES ? Expansion & Strengthening Operational areas (Runways, Taxiways) & Ground based landing and movement control ? Design, Development & management of Passenger & Cargo Terminals ? Provision of Passenger facilities & Information systems
Airport Economic Regulatory Authority (AERA) of India
Established in May 2009 ? To eliminate the dual role of AAI as a service provider & regulator of airports
?
KEY OBJECTIVES
• Regulate aeronautical services tariff for major airports* • Determine Development Fees • Determine Passenger Service Fees • Monitoring Performance standards (quality, reliability) Authority Purview: *Airports with Annual Pax of 1.5 million or any other airport notified by central govt Levied Tariffs to be reviewed every 5 years
Initiatives so far
MODERNIZATION of existing Metro Airports Details
Delhi
- GMR consortium – 74% - AAI – 26% Revenue Share to AAI – 45.9%
- GVK consortium – 74% - AAI – 26% Revenue Share to AAI – 38.7% Will be modernized by AAI Will be modernized by AAI -Developing Regional Hubs Two Pronged Approach by AAI - Airside Infrastructure by AAI - City side development by Private Sector
Mumbai
Chennai Kolkata Development of 35 Non Metro Airports
Initiatives so far
GREENFIELD Airports through PPP Route Details
Hyderabad
Completed in March 2008 - GMR Consortium – 74% - Govt of Andhra Pradesh & AAI – 26%
Completed in April 2008 - L&T, Siemens (Germany), Unique Zurich (Switzerland) – 74% - Karnataka Govt & AAI – 26% Navi Mumbai, Pune, Goa, Kannur (Kerela), Halwara (Punjab)
Bangalore
New Proposals
Airport Performance
Demand for International Gateways
Source: AAI Traffic News Report August 2009
Project Background and Need
? ?
?
? ?
Modernization of airports was initially considered in 1996. Task force set up in 1999 recommended outsourced management Liberalization of air travel services in recent past lead to entry of low cost carriers and caused a sharp increase in air traffic In 2003-04, Mumbai airport handled 13.3 million passengers of which 60% were domestic and 326 thousand tons of cargo of which 28% was domestic Analysts estimate 10-20% growth in traffic in the next 5-10 years Airports in India are inadequate to handle increase in traffic
Comparison of AAI Airports
•A high percentage of aeronautical revenue. •Very low revenue per employee. •Low Revenue per passenger.
Suggestions by Naresh Chandra Committee
?
Separate Economic Regulator – Active regulation of sector along with checking malpractices. (e. g – TRAI)
?
Reduction of Airport Charges – Mumbai is 49th most expensive airport but nowhere close to Hong Kong and other well developed airports. Contribution from non-aeronautical revenues to be enhanced.
Range of Private Sector Options
Public • • • • • Supply and Civil works contracts Technical Assistance Contracts Sub-Contracting Management Contracts (Inefficiency and Capital Problems)
PPP
• Leasing • BOT and concessions • (Control, Political Problem and Agency Problem)
Private
• BOO • Divesture by License • (Control, Conflict of Interest, Regulation and Safety Concerns)
Proposed Development Targets
?
Key Facilities at the Revamped CSIA
Facilities Parking stands for aircraft Boarding Bridges Car Parking Check-in counters Proposed 106 66 12000 339 Existing 84 18 36000 182
CSIA will be able to cater to passenger traffic of 40 million passengers per year. ? Handle cargo traffic of 1 million tonnes per year.
?
Developments under Master Plan
?
11 Rapid Exit Taxiways and 4 Parallel Taxiways to increase the operational efficiency of the cross runway system An integrated common user terminal catering to both domestic and international passengers designed by leading International Architects – Skidmore, Owings & Merrill (SOM)
?
?
A six-lane Elevated Road will be built in co-ordination with MMRDA, providing direct connectivity to New CSIA Terminal at Sahar, from Western Express Highway for quick access
Construction of New ATC Tower Plan and develop new international and domestic cargo facilities and utilization of Terminal-I areas
? ?
Developments under Master Plan (contd…)
? ?
Expansion of the airport operational area Major modification to the drainage system to improve operating conditions, especially during monsoon month Implementation of a model Slum Rehabilitation scheme in line with the State Government Policy along with Housing Development and Infrastructure Limited (HDIL) Environmental Up gradation through use of unique, integrated Architectural & Urban Design image, large green areas, indoor & outdoor Landscaped Areas, Rainwater Harvesting and Energy Conservation MIAL proposes to develop CSIA as a destination for Mumbai city by creating city-side infrastructure for Hotels, Business Centres, Retails, Entertainment and Leisure
?
?
?
Events
? ?
?
? ?
June 2003: AAI approves modernization of Delhi and Mumbai Airports September 2003: Cabinet approves restructuring via JV route with 74% equity by private consortium and 26% by AAI December 2003: EGoM approves appointment of ABN Amro as financial consultants September 2005: Bids received March 2006: GOI handed Mumbai airport to GVK consortium
Bid Details
? ?
4 Phase Bid Evaluation Process Phase I: Consideration of mandatory requirements
?
Phase II: Consideration of financial commitment Phase III: Minimum Benchmark of 80% required on two technical pre-qualification criteria
? Management Capability, Commitment and Value Add
?
Contd..
?
Phase IV: Assessment of financial consideration ? Based on percentage of gross revenue (aeronautical and non-aeronautical) that would be shared with government ? Bidder with highest revenue share would be successful bidder
Transaction Structure
Transaction Documents
?
Operation Management and Development Agreement (OMDA)
? AAI granting the right to operate, maintain, design, construct, upgrade, finance and manage airport to JVC ? Land leased for 30 years and in case of renewal lease renewed for additional period of 30 years ? AAI, GOI and PSUs to hold 26% and private participants 74% ? Foreign shareholding restricted to 49%
?
Lease Deed (LD)
?
Shareholders Agreement (SHA)
Contd..
?
State Government Support Agreement (SGSA)
? Agreement between respective state governments and JVC ? State Government to provide support to company and AAI on matters relating to encroachments, additional land for airport development, surface access, safety and security
?
Substitution Agreement (SA)
Bid Submission
?
List of Bidders
? ? ? ? ? ? Reliance – ASA GMR – Fraport DS Construction – Munich Sterlite – Macquaire – ADP Essel – TAV GVK – ACSA
Final Result
?
Mumbai Airport awarded to GVK ACSA
GVK Consortium
Contd..
ACSA (Airports Company South Africa) : Formed in 1993 and operates South Africa’s ten principal airports Handles around 200,000 aircraft landings and 23 Mn passengers annually ? Bidvest: Founded in 1988 and operates as services, trading and distribution
?
Contd..
?
AAI (Airports Authority of India): Formed in the year 1988 by merging International Airports Authority of India and National Airports Authority Manages 126 airports in India
Passenger Growth Forecast
50 40 30
20
10 0
International Domestic
• • • •
Peak Passenger Capacity would be attained in 2019 Due to recession there was a passenger de-growth in FY09 Domestic : International passenger ratio assumed to be 65:35 Passenger traffic growing at 12% annually prior to 2009 - Domestic passenger traffic growing at 14% - International passenger traffic growing at 9%
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37
Air Traffic Movement Growth Forecast
600 500 400 300 200 100 0
International Domestic FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37
• Peak Air traffic movement would be attained in the year 2025 • The maximum ATM would be 525,000 (inclusive of both domestic international) • The ATM would grow at 5.22% CAGR over FY10-FY25 • Domestic : International ATM ratio assumed to be 72:28
Cargo Growth Forecast
1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 International Domestic
• The current cargo capacity is 530,000 tonnes which would be increased to 1,000,000 tonnes by 2025 • The cargo capacity would grow at 4.04% CAGR over FY10 – FY25 • Domestic : International cargo ratio assumed to be 29:71
Revenue Sources
Landing Charges (27%) Passenger Service Fees (9%) Aircraft Parking Charges (1.5%) X-Ray Charges (0.5%) Oil Throughput (8.1%) Revenue NonAeronautical (45%) Food and Business (4.5%) Advertisement (3.2%) Aeronautical (38%)
Cargo (17%)
Duty Free (8.6%) Ground Handling ( 5.9%)
Lease Revenue
Others (14.9%)
Aeronautical Revenue
The landing charges are based on the weight of the aircraft. It is different for domestic and international flights. The PSF is split into two components viz. PSF Security and PSF Facilitation. Different PSF is levied on rupee and dollar tariffs
Passenger Service Fees
Landing Charges
Aircraft Parking Charges
X-Ray Charges
Housing charges levied in case the aircraft after landing is parked in a hangar or at a contact stand. The charges levied are linked to the weight
X-ray charges for domestic passenger aircrafts are based on seat capacity of aircraft. It is different for domestic and international flights.
Non-Aeronautical Revenue
Oil Throughp ut Food & Business
Duty Free
NonAeronautical Revenue
Advertiseme nt
Ground Handling
Others
Cargo Charges
Costs Involved
Annual Fees
Power & Fuel, Operations Support Cost, Salaries & Bonus, Contract Services & Other Overheads Paid to AAI @ 38.9% of the total revenue
Operating & Administration
Considering 10% Salvage value. Assets depreciated using SLM considering 15 year useful life
Depreciation
215 bps above 3 year GSec
Interest
Capital Structure
Debt : Equity : 72 % : 28 % Government Equity : Private Equity : 26 % : 74 % Debt Funding Details Investors IDBI led consortium comprising of Andhra Bank, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, India Infrastructure Finance Company Ltd. (IIFC), Indian Bank, IDBI, Oriental Bank of Commerce, Punjab National Bank, Syndicate Bank, United Bank of India, UTI Bank Ltd. and Vijaya Bank 42000 Million 17 years 7 years
Amount Tenor Moratorium
Interest Rate
The loan covers a seven-year drawl period. MIAL has procured an interest rate, which is benchmarked to three years Government Security plus a margin of 215 basis points. The loan will be repaid in 120 monthly payments.
Capital Structure
Equity Funding Investors ACSA Global Limited (Airports Company South Africa Limited) GVK Airport Holdings Pvt. Ltd. (GVK Industries Limited) Bid Services Division (Mauritius) Ltd. (The Bidvest Group Limited) Airports Authority of India (AAI) Country Mauritius % Holding 10.0 Amount (Millions Rs.) 1600
India
37.0
5920
Mauritius
27.0
4320
India
26.0
4160
Total
12000
Risk Distribution
Risk PreConstruction Description AAI shall obtain approval and authorization from GoI to make lease of the Airport and grant relevant Clearances requisite for operation and management of the Airport by the JVC To be borne by the JVC Transfer of Rights in Airport and Transition Phase shall be performed at its own risk and cost as if JVC was an original party to such contracts and agreements. AAI shall provide operational support to the JVC through the General Employees at the estimated annual Operation Support Cost. To be borne by the JVC To be borne by the JVC
Construction Operational
Commercial Financial
Risk Distribution
Risk Description
Political
Step-in Rights of AAI: In the event of an emergency, AAI shall have the right to temporarily assume control (upto 3 months) of the Airport in place of the JVC as per provisions of the State Support Agreement. Waiver of Immunity: The execution, delivery and performance by AAI of the Agreement constitute private and commercial acts rather than public or governmental acts and accordingly, no immunity from proceedings brought against it or its assets in relation to this Agreement shall be claimed. In the event that JVC becomes qualified to avail the benefits available under Section 10(23)(g) and Section 80 IA of the Indian Income Tax Act, 1961, as a result of which, the JVC incurs an increase in net after tax return or other financial gain or benefit, the JVC shall notify AAI and pay to AAI an amount that would put the JVC in the same financial position it would have, had the Benefits not
Regulatory
Other Risks faced by the project
Lower returns on high capex base ? MIAL’s business model could face the risk of lower returns given that a total of Rs 98bn will be spent to raise passenger capacity from 25mn to 40mn. ? However, the airport capacity can be stretched to 125% of the targeted capacity. This would effectively utilise non-aero revenue potential, which the management expects to grow at a 20% CAGR.
Other Risks faced by the project
Saturation in the long term owing to expansion constraints ? MIAL will reach its stipulated capacity by FY17-FY18 and its maximum possible capacity of 50mn by FY22-FY23. Given that there are space constraints precluding further expansion at MIAL, it could face saturation in growth in the long-term unless innovative means to expand capacity are adopted or the company wins the Navi Mumbai airport project bid.
Other Risks faced by the project
Execution risk ? HDIL is tasked with the rehabilitation of slum dwellers occupying airport land. The first phase is to be completed by January ’10, with 20,000 slum unit dwellers to be relocated. ? This is one-fourth of the estimated 80,000-plus units, though the government pegs the figure at closer to 65,000 units. Delays in land clearance can impact execution.
Financial Model
References
?
? ? ?
?
Airport Privatization in India: Lessons from Bidding Process in Delhi and Mumbai by Rekha Jain, G. Raghuram and Rachna Gangwar GVK Power and Infrastructure: Religare Hichens Harrison Report Airports Authority of India: http://www.airportsindia.org.in/AAI/main.jsp Operations, Management and Development Agreement between Airports Authority of India and Mumbai International Airport Private Limited for Mumbai Airport Chhatrapati Shivaji International Airport: http://www.airportsindia.org.in/AAI/main.jsp
Thank You!!!
doc_660391503.pptx