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Andy Mukherjee BIAL Article in Bloomberg - How BIAL distorts the truth

Bangalore's New Airport Is a Dream Going Sour: Andy Mukherjee

Commentary by Andy Mukherjee

June 2 (Bloomberg) -- What should have been a moment of fulfillment for India, after 17 years of false starts, delays and disappointments, is rapidly turning into a farce.

It has been less than a week since a brand-new airport opened in Bangalore, India's computer-software capital, and already there is a big question mark over whether the Indian government will be able to keep a key promise it made to private investors to get them to build the airfield.

The $618 million project, partly owned by Siemens Project Ventures GmbH and Unique Zurich Airport, is embroiled in a law suit initiated by Bangalore City Connect.

The citizens advocacy group is contesting the government's 2004 commitment to Bangalore International Airport Ltd. -- which owns and operates the new facility -- to close down the city's rickety, old, state-managed airbase, which was built in 1964 to test military planes and was later pushed into civilian service.

In granting monopoly rights to the new company, public interest has been neglected, City Connect says in its petition.

One objection is that the new airport is too small because planners underestimated demand.

As a result, it will be operating at full capacity in its very first year with traffic growing 30 percent annually. To close down the existing airfield, situated inside the city, and direct all travelers to a new one at Devanahalli, 40 kilometers (25 miles) from the city center, is madness, the critics say.

``All over the world wherever a private monopoly is created, public interest predominates,'' says T.V. Mohandas Pai, a member of the citizens group and a director of Infosys Technologies Ltd., India's second-largest computer-software developer.

Monopoly Rights

``Government has given a monopoly and it was done in circumstances that existed five years ago,'' says Pai. ``Things were totally different, there wasn't much traffic and growth was slow. Bangalore wanted an international airport.''

Albert Brunner, chief executive officer of the new airport, disputes that assessment. The existing runway can handle 20 million passengers a year, he says, compared with the 12.5 million expected in the first year of operations.

Besides, there's a plan to build a second runway, he says. But what he can't do anything about -- and what I suspect is the real issue here -- is ground transportation.

It has been eight years since the location of the new airport has been known; in all that time the state government of Karnataka state -- of which Bangalore is the capital -- didn't bother to build an expressway.

$488 Billion

The net result is this: A software engineer working in Electronic City on Bangalore's outskirts may end up spending three hours on the road to catch a one-hour flight to another destination within India.

That, more than anything else, is why frequent fliers of Bangalore are feeling cheated with an airport they have eagerly awaited for so many years.

The new airport is spread over 4,000 acres, has eight aerobridges, nine remote bays, 53 check-in counters and parking space for 2,000 cars. The old airport didn't even have a lounge for international business-class passengers.

India can't allow the Bangalore airport to become a public- relations disaster.

At stake is $488 billion in capital that the government estimates it would need to ease shortages in infrastructure: roads, ports, airports and power stations.

Independent Regulator

In the future, the national government has to view every project in its totality by making an inventory of amenities that a state or a municipal authority is expected to provide. The fees, tolls and levies accruing to sub-national governments from any project must be linked to these milestones.

And when the rules of the game have to be tweaked midway -- as at times they must be -- it helps to have these judgments come from independent regulators who have the expertise to make nuanced, data-based decisions that may be acceptable to all stakeholders.

Finally, demand estimation is too important to be left entirely to experts.

Companies such as Google Inc. are harnessing the power of prediction markets -- which gather information from a large number of participants -- to generate useful forecasts.

There's no reason why governments can't do the same.

(Andy Mukherjee is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Andy Mukherjee in Singapore at amukherjee@bloomberg.net

Last Updated: June 1, 2008 14:01 EDT
Devesh's picture

See how BIAL distorts the truth

I wrote this e-mail to the author Andy Mukherjee.
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Dear Andy

Greetings. Nice article.

I am the Chairman of the Infrastructure Committee of the Bangalore Chamber of Industry and Commerce, and I have been handling the airport portfolio at the Chamber since 1993. The capacity concerns at BIAL were first identified by me and my research was passed on the Bangalore City Connect foundation.

“Albert Brunner, chief executive officer of the new airport, disputes that assessment. The existing runway can handle 20 million passengers a year, he says, compared with the 12.5 million expected in the first year of operations.”

There are distortions in this claim of Mr. Brunner, as reported in your article, and I you may want the numbers re-confirmed. Using Mumbai as an example, the very best BIAL can achieve on a single runway is 15.22 million.

Mr. Brunner is cleverly distorting my research which used Mumbai airport, which incidentally is India’s most efficient and experienced ATC in terms of flight movements, and is also India’s gateway to the world i.e. much higher percentage of international flights and therefore much bigger flights i.e. more passengers per flight.

Mumbai achieved 20 million passengers, by having 720 flights per day, on TWO runways. The maximum number of flights per hour allowed by DGCA is 30. BIAL is cleverly distorting and inflating its capacity by assuming continuous 24 hour operations at PEAK volumes, and we know this is not true anywhere in the world. (The maximum flights per day per runway as recommended by IATA is 550, and this includes cargo flights).

Typically, in most major airports, the traffic is broken down 45% during peak hours, and 55% during non peak. Peak hours are normally 6 hours in a day. In India it is typically 6AM-10AM and 6PM-8PM.

Please see some articles on my blog that will elaborate further.

http://aviation.deveshagarwal.com/20...bengaluru.html
http://aviation.deveshagarwal.com/20...pening-in.html
http://aviation.deveshagarwal.com/20...ience-not.html
http://aviation.deveshagarwal.com/20...l-at-bial.html

In the passenger terminal history article, you can see how the terminal area has remained static at 71,000 sq. mtr., but the claimed passenger capacity has been steadily increased from 11 million to 14 million. That is something beyond my comprehension, and does not speak well of BIAL as a corporate citizen.

Thanks in advance and kind regards
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Devesh R. Agarwal

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Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

 

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Regards
Devesh
Bangalore Aviation
Enjoy life, destroy FUD
morash's picture

Queries Devesh!

I have a question for you Devesh.

Appreciate the fact that you are trying to educate people of the truth/facts about BIAL, but before accusing someone of "having stated" something somewhere, did you try and verify with the author as to where exactly he heard Mr. Albert Brunner make this claim. If he has not personally heard Mr. Brunner make this claim then where did this "quote" from Mr. Brunner was seen/heard/reported. Hearsay can only ruin reputations.

Before accusing someone of distorting facts based on a third person observation, I would presume you would have verified the author's claim. Appreciate if you can get this clarified from the author himself.

bialterminal's picture

i concur on capacity constraints

Devesh,

From the beginning I have been worried about BIAL's capacity going into the future with what is available in phase 1. It seriously cripples the ability to start international hub operations by an airline like KingFisher if it wants to start hub operations between south east asia/australia & the middle east/europe. Even Mumbai's efficiency can be increased and squeezed to the maximum if certain improvements are made. Even a 2 runway airport can be crippled by an inadequate terminal where passengers get stuck (like delhi's IGI today or old HAL airport) where flights have to be held to accomodate delayed passengers and baggage. I have highlighted some of these concerns at

http://bialterminal-indian-aviation.blogspot.com/  

I had highlighted the same facts in an ariticle http://www.skyscrapercity.com/showthread.php?p=19867312#post19867312 where I was highly critical at what has been delivered as a finished product which was "world class" befitting India's economically 2nd most important city today. 

Devesh's picture

Heresay

Morash

Point noted. Thanks.

"There are distortions in this claim of Mr. Brunner, as reported in your article, and you may want the numbers re-confirmed."

I have asked Andy to re-confirm the figures he has quoted. I posted my mail to Andy at Praja.

Can anyone from BIAL officially confirm what the terminal capacity is ? All that they say is that peak handling capacity is 2733 per hour or something similar. This was not their claim in their earlier press releases.

-----------------------

Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

 

-----------------------
Regards
Devesh
Bangalore Aviation
Enjoy life, destroy FUD

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