China is looking overseas for investors in its airports
Paul Lewis/SINGAPORE Kevin O'Toole/LONDON
The Civil Aviation Administration of China (CAAC) is to release investment guidelines later this year to enable foreign companies to take up to a 49% stake in the country's airports. The move follows a worldwide drive towards airport privatisation, including recent competitions in South Africa and Australia.
China's official Xinhua news agency reports that foreign investors will be offered opportunities in ground services, airport concessions, hotels and aircraft maintenance in return for taking a share in the construction and operation of major new airport projects.
According to the report, Wuhan's Tianhe Airport will be the first jointly managed by a foreign investor. The investor's identity has not been revealed, but industry sources say that Hong Kong based property company New World has already reached an agreement.
Other projects targeted for investment include the current modernisation and expansion of Beijing Capital International Airport and Guangzhou's planned replacement airport.
Aviation analysts warn that the decentralisation of CAAC control will complicate foreign investment in smaller airports, and so will the expanding role of local municipal authorities in running them.
The 142 airports in China include eight recently completed or expanded operations, such as Nanjing and Zhengzhou. Work on six other projects is under way, including Shanghai's new Pudong international airport and domestic airports at Chengdu, Lanzhou and Kunming.
China's pending search for investors follows a spate of similar moves elsewhere around the world. Italy's Aerporti di Roma (ADR), itself in the run up to the final phase of privatisation, is near to completing its deal to take a stake in the Airports Company South Africa(ACSA). ADR and an array of financial backers emerged as the successful bid team in March and will now pay R100 million ($20 million) for a 20% stake in ACSA.
They also have an option to acquire another 10% from the South African Government when the airport company moves to a full listing on the Johannesburg stock market in the next couple of years. Another 10% will go to a black empowerment group at some point in May.
ADR, which also took minority stakes in Italian airports at Genoa and Lamezia over the past year, says that the "objective of purchasing holdings in other Italian and overseas airport operators is of prime importance". Although ADR is still 55% owned by Italian state holding company IRI, there are plans to complete its privatisation by mid-year.
Australia also took another step in its efforts to find outside companies to run state-owned airports. Australia Pacific Airports Corporation, which is 15% owned by the UK's BAA and already has a grant for Melbourne, has now paid A$17 million ($11 million) for a 50-year lease to operate Launceston Airport.
BAA, which was also a bidder in South Africa, already manages US airports Indianapolis and Harrisburg and has taken control of both Naples Airport in Italy and its own stake in Melbourne.
Source: Flight International
