Vol. 7  No. 80                                         WE COVER THE WORLD                                                                       Friday July 25, 2008

 

India Airport Builders Go International

     The Indian aviation sector, which was on a high just about a couple of months ago, has been going through air pockets of late.
     That little fact, however, has not dimmed the enthusiasm of those related to the aviation sector – at least not those responsible for putting up infrastructure.
     So while airport building slows a bit at home, India’s airport builders are branching out overseas.
     With the successful completion of the Greenfield International Airport at Hyderabad, the GMR Group and rival GVK have been seeking similar construction projects abroad.
     The GMR Group led by the 57-year-old Grandhi Mallikarjuna Rao, left (or GMR as he is popularly known) is one of the fastest growing infrastructure organizations in India with interests in airports, energy, highways and urban infrastructure.
     Employing the Public-Private Partnership model, the group has successfully implemented several infrastructure projects in India.
     At the beginning of this month (July), GMR Infrastructure along with two other partners, Limak Insaat Sanavi and Malaysia Airports Holdings, landed the contract to construct a new terminal at the Sabiha Gokcen International Airport in Istanbul.
     It was a victory for the Indian company with only one airport on its job credit list.
     Among those who had also bid for the project were majors like Fraport, Venice Airport and others.
     The Turkey venture is GMR Infrastructure's first airport project outside of India.
     According to those associated with the project, the needle swung in favor of GMR because it had shown the capability to handle growing traffic at the Hyderabad airport.
     Apparently traffic growth at SGA is similar to what has been seen in Hyderabad and New Delhi airports also handled by GMR.
     Expanding its presence beyond Europe, the GMR group has recently bid to develop Chicago's Midway International Airport.
     However, in this project, GMR will find itself pitted against GVK, the business house that is managing and developing the Mumbai International Airport for the airport privatization plan.
     Like GMR, the GVK Group is a diversified business entity with its predominant focus on infrastructure and urban infrastructure projects.
     It has at its helm, the 71-year-old Gunapati Venkata Krishna Reddy (or GVK as everyone likes to call him). According to reports, along with GMR and GVK, there are at least six other bidders for the project.
Midway is owned by the State of Illinois USA and whichever private consortium is awarded the contract will be allowed to develop, operate and collect revenue from the operation of the airport for 50 years.
     The Chicago project is part of GMR's move to become an internationally recognized airport developer.
     In fact, the company has plans to venture into South Africa, the Czech Republic and even Russia for similar airport projects.
     For GVK, the other major player in airport infrastructure, Chicago Midway Airport will be an important milestone too.
     In fact, GVK Power and Infrastructure Ltd., a group company, has already outlined its plans to bid for airport projects in Europe.
     With no other big airports in the offing domestically, it is but natural for companies like GMR and GVK to look overseas.
     According to reports, the privatization of Midway would see the infrastructure companies sinking in more than a billion dollars.
     For its part, the City of Chicago has engaged Credit Suisse Securities (USA) LLC as advisor and Bank of America, M.R. Beal and Popular Securities as co-financial advisors to assist in evaluating the execution of the long-term concession and lease of Chicago Midway International Airport, as per the airport's website.
     The proposed transaction would be the first privatization of a major hub commercial airport in the United States. The proposed transaction would be implemented under the Airport Pilot Privatization Program authorized by U.S. federal law and administered by the Federal Aviation Administration.
Tirthankar Ghosh

Seventh Month Not Magnificent

     Just when you thought a couple weeks at the beach could not deliver any more surprises, turns out it is still not safe to go into the water as seven freight forwarding companies have agreed to pay USD$666,237 to resolve allegations of bid rigging in the U.S., and to cooperate with authorities.
     Air Land Forwarders will pay $72,513; Arpin International Group, $59,017; Covan International, $51,358; Jet Forwarding, $50,751; and SIRVA companies - Allied Freight Forwarding, Global Worldwide and North American Van Lines - will pay $432,598.
     In addition to these payments, each of the seven freight forwarding companies have agreed to cooperate with the government as it pursues claims against Belgium-based Gosselin Worldwide Moving and Germany-based Birkart Globistics, ITO Möbel Transport, Viktoria International Spedition and Andreas Christ Spedition & Möbeltransport, all of whom allegedly participated in the bid rigging scheme.
     The U.S. contends that the seven settling freight forwarding companies furthered the conspiracy by submitting bids to the Pentagon at specific elevated price levels according to the instructions of other conspirators and that they were subsequently awarded transportation contracts based on their non-competitive bids.
     "These settlements reflect the United States' determination to combat schemes that undermine the integrity of the military's right to acquire services at a competitive price," said Gregory Katsas, acting Assistant Attorney General of the U.S. Justice Department’s Civil Division.
     OK, so we understand that baddies are out there.
     But you know what?
     In almost every case, law enforcement snags some people or maybe an entire company, and uses that gotcha to unlock a case against air cargo at large.
     And who has law enforcement gotten to lately?
     Like in the surcharge scandal?
     Well aside from some early retirements how about that U.S. cargo guy Bruce McCaffrey who fronted Qantas Cargo for 30 plus years even as a handicapped worker and ended up recently thrown under the bus?
     Bruce reported daily for most of his adult life to Qantas.
     It makes you sick, like a fist stuck in the stomach, what is going on these days.
Geoffrey

Talk About An Ad Dominator

     Remember that British Concorde that used to sit at the center of the roadway roundabout entrance to Heathrow?
     Now the airplane on the spot is a giant model big as a B737 of an Emirates A380.
     The model weighs 45 tons, which adds up to the lift of a DC8 but Tim Clark Emirates President sees only good things.
     “We expect this landmark site to become an icon for both Heathrow and Emirates. While the previous Concorde model represented the past, our A380 represents the future – and it is a future of cleaner, quieter aircraft."
     Mr. Clark is pictured with the Mayor of Hillingdon, Councillor Brian Crowe who put on his finest ceremonial duds for the occasion.


FlyingTypers In
Your Own Write


TO: geoffrey@aircargonews.com
SUBJECT: tsa strikes again

     As a long time member of our industry (1982-present) I am finding that TSA is creating more problems than they are solving – April 9th 2009 is just another example of that “problem creation” instead of “problem solving” in an earlier interview the leader of TSA said we in the industry should embrace TSA and work with them – I know of several freight forwarders and custom brokers who would love to “EMBRACE” an inspector – but the problem would be once we got our hands on one we wouldn’t want to let go – The policies and actions of TSA are often very confusing and different departments don’t seem to know what the other is doing.
     Example: As a vendor I was told that I had to go thru a security threat assessment; as a hazardous materials handler I was told I had to go thru a federal background check – in Texas the background checks are done by our Department Of Public Safety (DPS) office – since my commercial driver’s license was issued before the background requirement and doesn’t expire until 3-2011 – Texas DPS would not do a background check until 2011 –
      I had already had a FEDERAL BACKGROUND check for my CHL (Concealed Handgun License) but TSA would not recognize it even though it was a U.S. GOVERNMENT BACKGROUND CHECK that was most likely done by the same agency that does the TSA background check.
      So I bite the bullet and spent another $150.00 for a Transportation Worker Identification Credential (TWIC) card, which would give me another FEDERAL BACKGROUND CHECK – most likely done by the same agency that did the first one for my CHL.
      It would be so nice if TSA departments could all get on the same page at the same time – and I’m almost certain that if you use these comments with my name attached I will get a VISIT from TSA to see why I am speaking out against them.
     If possible, call me a source from Texas so I don’t get into trouble.
      From my own experience – the inspectors I have dealt with – have come from many other backgrounds other than “TRANSPORTATION INDUSTRY” – it baffles me how someone who knows little to nothing about our industry can establish and enforce guidelines that don’t work –
     Yes, my facility is secure – yes, we open every box that comes to us for handling and repacking – but we did all these things before 911 and TSA – REGULATIONS –
      One voice in the wilderness –
      Thank you for the many articles you publish helping to keep our industry informed.

Geoffrey,

     Just a quick note to agree whole-heartedly with the comments of M. Afzal Malbarwala Of Galaxy, India.
     It’s high time all of us in the forwarding industry take a stand regarding the collection and payment of surcharges. We charge them for the carriers, pay them to the carriers, pay our banks interest for the money when shippers don’t pay us on time, and get ABSOLUTELY nothing for these services. In return, when we ask the carrier to collect a few dollars for us, we have to PAY THEM for their service, at a 10% rate of the amount collected ($20 USD minimum), which to me is quite a bit for what is basically a quick electronic transaction.
     I’d love us all to start demanding even a small percentage of the surcharges we collect (maybe 5.5%), as a commission, which would help offset the bank loans I’m sure most of us are dealing with regularly to pay what is now totally outrageous amounts for the fuel surcharges.
     Maybe KL/AF saw this coming, and feel that by increasing the “rate” will decrease any commission that we might be successful in obtaining.
     We’re freight forwarders, having enough collection problems with our customers in this disastrous economy, that we don’t have to continue being the carriers’ collection agents as well, with no compensation.
     Do my colleagues agree?? I’m sure they do, even under their breath.

Bob Feldman
Director, International Transportation,
Pilot Freight Services
Tele: 610-616-5131
Fax: 610-548-7066
Email: bfeldman@pilotdelivers.com