wheelbay
5th Sep 2005, 12:41
Time to privatise Acsa
Bruce Whitfield
Fri, 02 Sep 2005
Correct me if I am wrong, but did I hear right this week when the MD of the Airports Company South Africa (Acsa) said it was going to cost local and domestic travellers more for the privilege of using our national airports?
Upgrades funded by taxpayers?
Please don't misunderstand me, the major aircraft arrival and departure hubs in this country are magnificent, but it seriously gets up my nose when I consider this is largely a state-owned enterprise that over the past five years has paid dividends of around R2-billion into the national coffers. Surely any upgrade that will further contribute to the future revenue-generating abilities of Acsa should be funded directly by its shareholders and not from increased taxes on customers?
It looks like Monhla Hlahla is asking the travelling public and foreign visitors to stump up the R5-billion required to get our airports ready for 2010 and beyond.
Why not a Telkom-style IPO?
If ever there was a reason for privatisation, this is it. Why not list Acsa on the JSE, in a Telkom-style IPO? Investors who took up some 20 percent of Telkom have been handsomely rewarded over the past two-and-a-half years with returns on their original investment in excess of 500 percent.
The current Acsa shareholding has 75 percent in the hands of government and another 20 percent in the hands of Aeroporti di Roma — the Italian airports manager who invested about six years ago, but now wants to get out, provided it can find a willing buyer.
Acsa profitable
Consider for a moment that Acsa is so profitable, that its own regulator two years ago instructed it to return what he called "super-profits" back to the airlines, its main customers. Aeronautical revenues generate 55 percent of Acsa's profits and the airlines have been feeling hard done by as the company operates a monopoly on major arrival and departure points.
Acsa refused to return the cash and instead has agreed on a formula that effectively will return money in the form of rebates into the future. Not a bad solution if you are a shareholder. As a potential investor, this is the sort of company I might consider investing in.
Monopoly
It has a monopoly, and provided South Africa's boom times and increasingly squeaky clean international image are preserved, loads of eager visitors should flood through our airport turnstiles. But something is keeping government back from what should be a perfectly logical solution.
Empowerment
Acsa requires a massive capital injection. List 30 percent of its shares on the JSE at a reasonable price and invite South Africans to participate in the future upside. Give it an empowerment flavour — discount shares to black South Africans as Telkom did, and let them enjoy some of the upside. We will then have better quality airports with sufficient terminals and facilities to keep our visitors happy and they won't be forced to pay through the nose for their arrivals and departures.
Simplistic? Yes, but as an occasional airports user who is up to my gills over paying outrageous fees for parking at Johannesburg International, I would be a lot happier if I thought I would get some of my hard-earned cash back in the form of a juicy shareholder's dividend.
Time for privatisation has arrived
The time for privatisation has arrived. It will be a lot easier to sell the dream of airport ownership to ordinary South Africans before the World Cup than after it.
Bruce Whitfield
Fri, 02 Sep 2005
Correct me if I am wrong, but did I hear right this week when the MD of the Airports Company South Africa (Acsa) said it was going to cost local and domestic travellers more for the privilege of using our national airports?
Upgrades funded by taxpayers?
Please don't misunderstand me, the major aircraft arrival and departure hubs in this country are magnificent, but it seriously gets up my nose when I consider this is largely a state-owned enterprise that over the past five years has paid dividends of around R2-billion into the national coffers. Surely any upgrade that will further contribute to the future revenue-generating abilities of Acsa should be funded directly by its shareholders and not from increased taxes on customers?
It looks like Monhla Hlahla is asking the travelling public and foreign visitors to stump up the R5-billion required to get our airports ready for 2010 and beyond.
Why not a Telkom-style IPO?
If ever there was a reason for privatisation, this is it. Why not list Acsa on the JSE, in a Telkom-style IPO? Investors who took up some 20 percent of Telkom have been handsomely rewarded over the past two-and-a-half years with returns on their original investment in excess of 500 percent.
The current Acsa shareholding has 75 percent in the hands of government and another 20 percent in the hands of Aeroporti di Roma — the Italian airports manager who invested about six years ago, but now wants to get out, provided it can find a willing buyer.
Acsa profitable
Consider for a moment that Acsa is so profitable, that its own regulator two years ago instructed it to return what he called "super-profits" back to the airlines, its main customers. Aeronautical revenues generate 55 percent of Acsa's profits and the airlines have been feeling hard done by as the company operates a monopoly on major arrival and departure points.
Acsa refused to return the cash and instead has agreed on a formula that effectively will return money in the form of rebates into the future. Not a bad solution if you are a shareholder. As a potential investor, this is the sort of company I might consider investing in.
Monopoly
It has a monopoly, and provided South Africa's boom times and increasingly squeaky clean international image are preserved, loads of eager visitors should flood through our airport turnstiles. But something is keeping government back from what should be a perfectly logical solution.
Empowerment
Acsa requires a massive capital injection. List 30 percent of its shares on the JSE at a reasonable price and invite South Africans to participate in the future upside. Give it an empowerment flavour — discount shares to black South Africans as Telkom did, and let them enjoy some of the upside. We will then have better quality airports with sufficient terminals and facilities to keep our visitors happy and they won't be forced to pay through the nose for their arrivals and departures.
Simplistic? Yes, but as an occasional airports user who is up to my gills over paying outrageous fees for parking at Johannesburg International, I would be a lot happier if I thought I would get some of my hard-earned cash back in the form of a juicy shareholder's dividend.
Time for privatisation has arrived
The time for privatisation has arrived. It will be a lot easier to sell the dream of airport ownership to ordinary South Africans before the World Cup than after it.