Transparency key to getting private sector to develop airports , says expert

Getting the private sector to build airports is possible with the right incentives. (File pic)

LANGKAWI: If Malaysia’s plan to get the private sector to develop airports is to succeed, the government must be transparent on the rules and criteria for success, says an official with the world’s sole trade representative for airports.

Speaking on the sidelines of an event here, Airports Council International (ACI) director-general Angela Gittens said governments around the world had found it possible to get the private sector to build airports if they were given the right incentives.

She said private investors liked the fact that returns from airports were stable and sustainable for long periods.

“This matches the interests of private investors like pension funds,” she said in commenting on the government’s plan to change the development model for airports.

Earlier today, Transport Minister Anthony Loke said the government was looking at shifting the development expenditure for airports from the public to the private sector to avoid putting a strain on the government’s finances.

Airports Council International director-general Angela Gittens.

Gittens said this was something which made sense to many governments given their other commitments such as building roads and hospitals, as it was harder to get investors to build these compared to airports.

But she said the government must make it possible for private investors to get returns or they won’t invest, something which Loke alluded to earlier today.

“The private players must also manage the airport properly and work with the government to understand what the government’s plans are,” she said on the sidelines of the ACI Asia-Pacific Small and Emerging Airports Seminar 2018.

She said the government could set parameters, define the success and set the rules, then the private investor would price this in their tender proposals.

“What the private investor doesn’t want is not knowing what the government wants. Success needs to be defined, the investors can’t come in, set up and then have the government say they want something else.

“Private investors want certainty. The government can ask for whatever it wants but it needs to ask in advance.”

She also said the government must avoid micromanaging any agreement made with private investors and that the airport operator should be allowed to find the best way to meet the goals set by the government.