By Anne Graham

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Again as with the trade sales, management and technological expertise will be bought in to run the airport. Since the privatized airport will only be handed over for a fixed period of time, the government owner will have a greater degree of control than with an outright sale and will receive a regular income. This has proved more politically acceptable in some countries, for example, in South America where a number of concession arrangements were negotiated in the late 1990s. Here, traffic growth was predicted to be high but in many cases the infrastructure was inadequate and the governments were unwilling or unable to invest in the airports (Ricover, 1999).

Another example of a BOT project was the international passenger Terminal 3 at Ninoy Aquino International Airport in Manila. This was the first project finance model of its kind in the Asia Pacific region but proved unsuccessful after a few years because of a major dispute between the government and the private consortium, the Philippine International Air Terminals Co. (PIATCO), which was led by Fraport. A more recent example is a 25-year BOT project which was agreed in 2007 to develop a new terminal at Queen Alia International airport in Amman in Jordan.

Airport privatization can occur in different ways (Carney and Mew, 2003). The types of privatization models broadly fall into five categories: 1. 2. 3. 4. 5. share flotation trade sale concession project finance privatization management contract. The selection of the most appropriate type of privatization involves a complex decision-making process which will ultimately depend on the government’s objectives in seeking privatization. For example, is the type of privatization required to lessen the burden on public sector finances, generate funds from the airport sale, increase share ownership or encourage greater efficiency, competition or management expertise within the airport sector?

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