Azlan Morad

All craftsmen have their favourite set of tools from which to practise their trade. In my case as a PPP proponent, my essential tool is the Airport Master Plan (AMP).

I originally wrote an article on the role of the AMP in PPP development for New Airport Insider (www.newairportinsider.com) in May 2016. It described an airport through its complex dynamics of turning around aircraft and processing their associated payloads. Through the logic of the AMP, I commented on operational scale and functional interdependencies at airports, and the need for the disparate elements to converge towards achieving a compelling business case to solicit private investment.

The article has continued to attract interest including positive responses from members of WAPPP. Arising from this, I am happy to extend the article to readers of The PPP Times.

Although the article is airport specific and may differ in scale and complexion to other areas of infrastructure development, I nevertheless hope readers at WAPPP may find useful parallels that may be relevant in various other ways where a PPP approach is being contemplated or initiated.

Article Synopsis

To attract private investment, airports, like all other asset classes, need to possess “enterprise value”. Simply put, there is commercial gain to be made from owning and operating an airport asset.

Airports that are well and professionally run generally present themselves as attractive assets. They become even more attractive if they can also make business sense and demonstrate profitability as a going concern in their own right. Getting to this state is fundamentally a challenge for most airports.

Air traffic worldwide has mushroomed exponentially. It has exacerbated the scale, operational complexity and cost of airport development. They have become too onerous for governments and their bureaucratic framework to handle by themselves. This has raised the interest of governments (as legacy stakeholders) to draw in private investment to support future airport development. The PPP framework fundamentally fits with this sentiment, and has brought in the commercial dimension that is now inextricably tied to the ownership and operations of mainstream airports.

The operational complexion of airports, from managing urban ingress-egress to the invisible airways leading aircraft to land and takeoff again, can total to some 800 intertwined functional elements within a standard medium sized airport. These technical demands impact on the scale of physical facilities, human resources, systems and on how an airport is operationally integrated in its entirely.

Coupled to strict regulatory and tight contractual regimes, the resultant PPP ownership and operational regime for airports become rather complex.

Planning for an airport’s future involves the resolution of many issues. They may include, amongst others:

  • scale of technical/operational processes
  • demand for new technology adoption
  • multilateral political and bureaucratic complexion
  • stringent regulatory regime
  • socio-economic significance
  • environmental impact
  • high CAPEX and OPEX regime
  • increasingly specialised HR demands
  • unpredictable market conditions

It is within this complexity that the logic and structure of an Airport Master Plan (AMP) becomes compelling. If done well, it provides a comprehensive framework from which all airport elements can be detailed, consolidated and extrapolated downstream. It provides the basis for deliberations and critical decision making between disparate stakeholders. As a common dashboard of information, a good AMP engenders transparency and bridges the trust deficit between conflicting interests. It enables the articulation of an airport’s operational capacity, its CAPEX and OPEX requirements, and so on.

This is the direction the narrative takes - with the AMP standing as a tool to facilitate complex discourse and in facilitating a path towards an equitable business case for private investments in airports.

The full article may be reached through this link:

https://www.newairportinsider.com/blog/public-private-partnership-ppp-what-you-need-to-know

I hope you will enjoy the read. Please feel free to forward your comments and/or further thoughts on the subject if any. I shall gladly respond.

Thank you for your interest.

Azlan Morad

About the author:

Azlan Morad (This email address is being protected from spambots. You need JavaScript enabled to view it.) is an independent airport consultant with 25 years international sector experience. His work covers a broad range of airport development issues in both scale and complexity. From his professional background as commercial pilot (B737) and architect, Azlan harnesses the airport master plan as an analytical tool to facilitate discourse and technical due diligences to reach equitable closures in airport PPP transactions.

His evidence-based analytics have guided critical decision-making at numerous airports; helping align airport performances with investor and commercial interests whilst crucially maintaining acute sensitivity towards balancing socio-economic and people oriented Strategic Development Goals (SDG’s).

Amongst Azlan's clients were Fraport AG, Inchon and Kuala Lumpur International Airports, Aerodrom Ljubljana, the Swedish Civil Aviation Administration, Airports Authority of India, Malaysia's Sovereign Wealth Fund (Khazanah), KPMG, BP, EBRD, and Hochtief Airports GmbH.

Azlan operates via CrissCross International (www.crissx.org), a boutique consultancy based in Germany.

In his PPP advocacy role, Azlan also acts as special airport adviser, in the PPP Team of Specialists, to the United Nations Economic Commission for Europe (UNECE), Geneva (since 2014).

CrissCross International | www.crissx.org