Airports Company South Africa Limited (ACSA) today announced that the Consortium it formed in July this year, together with South African partners Old Mutual, The BidVest Group Limited and Indian partner GVK Industries Limited, has received official notification from the Government of India that it had been pre-qualified in the bid to participate in the privatisation of India’s Mumbai and Delhi airports.
Said ACSA managing director, Monhla Hlahla: “ACSA is strategically seeking opportunities beyond its South African borders in the developing world, primarily commercial opportunities that enhance trade and economic exchanges for the socio-economic development of Southern Africa. The Indian airports privatisation transaction has been identified as one such opportunity. India is a major emerging market that is experiencing surging economic growth, which has had a direct impact on its air traffic. Aircraft movements have grown at a compounded annual growth rate of 6,2% over the last five years and this trend is expected to continue. Clearly the propensity to travel is high and with ACSA’s experience in managing an airport slightly larger than both Mumbai and Delhi airports ACSA is ready to take its rightful place on the global stage. I believe the Consortium is well suited to champion the transformation of India’s Mumbai and Delhi airports.”
ACSA assumes the role of airport operator in the Consortium, its particular airport management expertise being twofold. Firstly, ACSA has in-depth experience in developing and managing a network of airports in the developing world, which is characterised by a rapidly changing environment. Secondly, ACSA has extensive experience in managing airports ranging in size from the smallest to O.R. Tambo International Airport, which handled 12,5 million passengers in 2003 and is slightly larger than both Mumbai and Delhi airports.
The South African High Commissioner in India, Mrs. Maite Nkoana-Mashabane, expressed the South African Government’s support for ACSA’s, the South African Consortium’s and the GVK-SA Consortium’s participation in the Indian airports privatisation bid by stating: “The South African Government is enthusiastic in respect of a partnership with India, which supports its Countries of the South initiative, and would like to have the privilege of playing a role in contributing to the development of infrastructure, and in particular airports, to the socio-economic benefit of the people of India. Consequently, ACSA’s and the South African Consortium’s participation in the Indian airports privatisation bid has the full support of the South African Government.”.
ACSA believes it is part of a world-class Consortium that collectively reflects the synergies and similarities that exist between India and South Africa, which the Consortium believes places it in a unique position to partner with the Government of India in developing these airport infrastructure assets that are fundamental to the continued economic growth of India. The South African Consortium, led by ACSA, is supported by strategic partners Old Mutual and The BidVest Group Limited whose skills are well suited to a project of this nature.
“Over a period of 10 years ACSA has developed an array of products and gained invaluable expertise in airport management, a competence that now serves ACSA’s growth strategy and its vision of championing aviation in Africa and the developing world. As the preferred bidder for the concession to develop, operate and manage the Maputo International Airport ACSA is in the final stages of concluding the legal documentation which will grant ACSA the concession.”, concluded Hlahla.
On behalf of the South African Consortium by ACSA
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Background information contained in the pages hereafter
More about ACSA
ACSA, South Africa’s primary airport company, was partially privatised in 1999 when 25,4% shareholding was sold to foreign and South African private sector shareholders. Over the past five years the group’s revenue grew by 84% and net income after tax by 55%. ACSA’s performance over the past 10 years has illustrated its effectiveness as a transformed and globally competitive, partially privatised state-owned enterprise. The company has grown profits year after year and has paid dividends totalling US$188,04 million to its shareholders, the maiden dividend of US$5,9 million having been paid in 1996/1997. Over this same period ACSA has invested over US$655,9 million in creating new and upgrading existing airport infrastructure. The company has continued to represent a secure and lucrative investment for both its foreign and local shareholders simultaneously with making substantial infrastructural developments.
The ACSA network of airports
ACSA’s network of 10 airports generates over 90% of South Africa’s air traffic. In the financial year ending 31March 2004 this network generated nearly 23,8 million passengers and welcomed 213 000 aircraft landings from 20 destinations within South African and nearly 50 outside of the country’s borders. The contrast with the results of eight years ago is striking: for the financial year ending 31 March 1997, this network of airports had generated only 11,7 million passengers and 118 000 aircraft landings whilst it played host to less than 20 foreign markets.
International and local awards
The quality of the facilities and services built by ACSA over the years, the service delivered by ACSA and other airport employees, its commitment to corporate governance and its ranking in terms of cost-efficiency have been recognised by a large number of international awards and a reputation in the international aviation industry as a world-class airport operator. ACSA has been recognised with a large number of international awards, including but not limited to:
• 1998 Non-listed Company of the Year Award;
• Runner-up (1998 and 1999) in the Deloitte & Touche Corporate Governance Award for listed and non-listed companies;
• 2000 Steel Construction Award for the company’s role as a developer in the construction of O.R. Tambo International Airport’s retail project from the South African Institute of Steel Construction;
• Finalist in the 2001 Growth Development Awards;
• Durban International Airport received the IATA Global Airport Monitor Survey Airport World Service Excellence Award for ‘Runner-Up: Best Domestic Airport in the World’ in 2002;
• African Airport of the Year Award (for three consecutive years) for the company’s efforts in modernising O.R. Tambo International Airport;
• Cape Town International Airport voted Africa’s Leading Airport at the Annual World Travel Awards (for four consecutive years);
• ACSA received an award for O.R. Tambo International Airport being the most improved airport in Africa as part of the President of the USA’s ‘Safe Skies” initiative;
• A recent survey of the world’s leading airports confirmed that ACSA’s network of airports ranks as the third most cost-efficient in the world.
The 2003 results of the International Air Transport Association (IATA) and the Airports Council International (ACI) Global Airport Benchmarking Programme – called the AETRA Programme – placed ACSA’s airports as follows:
• Cape Town International Airport was ranked first in the two categories ‘Best Airport 5 – 15 Million Passengers Per Annum’ and ‘Best Improvement in Overall Satisfaction’ whilst the airport was ranked second in the category ‘Best Airport Middle East and Africa’.
• Durban International Airport was ranked second in the category ‘Best Airport 0 – 5 Million Passengers Per Annum’.
• O.R. Tambo International Airport’s state-of-the-art new domestic terminal – Terminal B – which officially opened in February 2003 only, was ranked fourth in the category ‘Best Domestic Airport’.
Tough challenges faced by India, mastered by South Africa
Similarly to the Indian airports, prior to ACSA’s formation in 1993 the government managed South Africa’s principal airports and, in ACSA’s case, in a very fragmented manner. It was ACSA’s focus on transforming this business into a purposeful, market-driven, service-oriented and profitable commercial enterprise that has and continues to be the foundation of the company’s success.
Regarding Black Economic Empowerment, ACSA has consciously created an environment which supports this philosophy. From retail and construction opportunities to services management, there is not an area excluded from the advancement of these communities. ACSA’s spirit of partnership sees it being a world-leader in creating economically sustainable world-class airport infrastructure and services in the developing world through partnering with both emerging entrepreneurs and established institutions.
More about Old Mutual
Old Mutual Asset Managers
Old Mutual Asset Managers (South Africa) (Pty) Ltd is a wholly owned subsidiary of the Old Mutual Group. OMAM is based in Cape Town and had some R265 billion in assets under management as of 30 June 2004, making it the biggest South African asset manager. As a major player in the local institutional market it offers a wide range of investment products to local and international investors, including segregated and pooled portfolios (specialized, customized and international portfolios). Furthermore, OMAM manages life funds and unit trusts on behalf of the Old Mutual Group.
The Old Mutual Group
Old Mutual plc is an international financial services group whose activities are focused on asset gathering and asset management. We offer a diverse range of financial services in three principal geographies: South Africa, the United States and the United Kingdom. The company is listed on the London Stock Exchange with a market capitalisation of approximately $7 billion as of 19 August 2004, and is ranked 304th on the 2004 Fortune Global 500 list of "the world's largest corporations". Global Assets Under Management are $253bn.
Old Mutual South Africa
In South Africa, Old Mutual are the largest financial services business, through our life assurance, asset management, banking and general insurance operations. Old Mutual South Africa owns majority stakes in Nedcor, and Mutual & Federal. The company serves 4 million life assurance policyholders and employs over 13 000 South Africans in its local operations. Our core businesses enable millions of South Africans to acquire wealth, financial independence and security. We are committed to fostering a culture of savings and self-reliance and are actively involved in many key issues including Black Economic Empowerment, affirmative procurement, rural economic development and AIDS Education. Old Mutual’s investments in infrastructure have paved the way for massive improvements within the fields of electrification, water and housing. The Old Mutual Foundation, in partnership with various organisations, has established the Rural Economic Development Initiative, a development project that offers substantial financial support and practical encouragement to dozens of organisations and individuals. Old Mutual has committed R27m over three years to this project.
Old Mutual is also an active member and supporter of many business organisations and multi-stakeholder forums. These include: the Life Offices Association, Black Management Forum, National Business Initiative, Business Trust, Association of Black Accountants of Southern Africa and President Mbeki's Big Business Working Group.
More about The BidVest Group Limited
The BidVest Group Limited is an international services, trading and distribution group and one of the largest industrial companies by market capitalisation on the JSE Securities Exchange South Africa with a current market capitalisation of R23,8 billion (US$ 4,0 billion). It has operations in Australasia, Continental Europe, United Kingdom and sub-Saharan Africa, employing 82 000 people on three continents. Despite its size BidVest is a highly entrepreneurial, decentralised and incentivised business. BidVest not only partners with ACSA in providing various airport services at its airports, but also has a joint venture with ACSA for the development of logistics precincts at its airports. Further information is available from www.bidvest.com.
More about GVK Industries Limited
Indian partner GVK Industries Limited is a multi-million, multi-locational business conglomerate with operations both in and outside India. GVK’s primary emphasis in the Consortium is on infrastructure development as it has become a pioneer in India on this front whether it is in the power field, with the India’s first IPP, or in the road sector with the country’s largest BOT project. The group’s total asset base including projects under construction is over R4,4 billion (US$766,6 million) and it has over 3 000 employees spread over its various units.
For the South African Consortium entry into India holds immense attraction. Wide-ranging reforms pursued by the Government of India since the 1990’s have paid off as key indicators show healthy growth in the industrial and services sectors, low inflation and interest rates, strong balance of payments and foreign exchange reserves with currency appreciation. Real GDP growth in the financial year ending 31 March 2004 was between 7,5% and 8,0%.
Recognised as one of the world’s most buoyant emerging markets, India’s population is approximately 1,0 billion with a population growth rate of 1,44% and 63,5% of its population being income generators. It is believed that India will overtake China – with an estimated population of 1,3 billion – as the world’s most populous country by the middle of this century. The World Gazetteer 2004 ranks Mumbai as the second most populous city of the world with a population of 12,6 million whilst Delhi is ranked sixth with a population of 10,4 million.