Airports Company South Africa to spend USD2.7 billion on infrastructure developments

(CAPA) With passenger traffic estimated to be in excess of 45 million passengers p/a by 2012 from the current 32.8 million, Airports Company South Africa (ACSA) will be spending USD2.7 billion on infrastructure developments at its network of ten airport over the next five years.

Passenger demand, on the back of strong economic performance, is largely driven by the entry of LCCs into a market where a growing proportion of the population can now afford air travel. The entry of new foreign carriers including Delta, Thai Airways and Virgin Nigeria buoyed international passenger arrivals.

"It is pleasing that the Regulator has authorised new tariffs that will make it possible for ACSA to undertake its development programme for the airports," says Khulile Boqwana, ACSA’s Group Specialist, Economic Regulation.

"ACSA has been experiencing, and will continue to experience, strong demand growth due to the rapidly growing GDP in South Africa and the surrounding geographical region, as well as the upcoming 2010 Soccer World Cup. "To fully appreciate the impact current and expected passenger growth has had on the business, we will have to spend about R4,9 billion (USD679.5 million) over the 12 month period to 31-Mar-08. This is an enormous leap considering that we spent about the same amount over the previous five years period and now have to do it in one year," he added.

The USD679.5 million billion is part of the USD2.7 billion infrastructure development programme ACSA will embark upon over the five year period to 2012.

Bongani Maseko, the Group Executive, Operations, says delivering efficient and customer focussed service is what underpins the company's focus over the period leading up to 2010 and beyond. However, for this to happen there is a related cost that needs to recovered.

The Permission Document, based on earning a reasonable return on the existing ACSA asset base, capital expenditure plan and operating costs provides an average increase of airport charges of 11.4% during the regulatory period.

Over the past five years to 2006, average passenger service charges were increased by an average 4%. The increase for the current financial year is 9.8% while the overall average annual increase over the five-year period is 11.4%.