Page 20 - C:\Users\Tharindu Dissanayake\Documents\Flip PDF Professional\CMA JOURNAL 2021_compressed\

20 CERTIFIED MANAGEMENT ACCOUNTANT

Modernising manufacturing facilities, because there When the severity of the pandemic
is a much greater customer aspect,”
became clear in March last year,
Mumbai’s airport says Jain. however, his efforts turned to stemming
the flow of CSMIA’s financial losses.
“I was approached for the role at MIAL,
MIAL was formed in 2006 with the and I thought it would be an exciting Fixed costs, such as interest, utilities,
mandate of modernising and upgrading new sector for me. I’ve enjoyed the maintenance and employee expenses,
CSMIA as a joint venture between journey.” represent 80 per cent of airport
Airports Authority of India (26 per cent) operating expenses. Jain says CSMIA’s
and a private consortium led by Indian This journey took an unexpected turn operating costs have reduced by only
conglomerate GVK (74 per cent). Under when COVID-19 changed the course 12 per cent since the beginning of the
MIAL’s stewardship, the airport has of 2020. Between April and August last pandemic, while aeronautical and non-
undergone significant transformation, year, CSMIA’s international passenger aeronautical revenue dropped by 70
including the addition of an 84-metre- numbers plummeted by 96 per cent per cent.
tall, wishbone-shaped air traffic control from the previous year, and domestic
tower and the modernisation of a numbers dropped by 94 per cent over “Airports are ‘lumpy’ investments,”
second air terminal, known as T2, with the same period, despite local travel says Jain. “There is a lot of capital
a design that draws inspiration from bans being lifted in May. expenditure at the beginning. Interest
India’s national bird, the peacock. repayments present cash flow issues,
and we are not contemplating how to
In 2017, MIAL won a bid to build Navi “ou are hand-to-mouth with surmount this issue, because we have
Mumbai International Airport, a second If y to do something to infuse cash so that
airport for a city of 20 million people your availability of cash, any operations can remain ongoing.”
that is growing by 5 per cent year on disruption will hurt. There
year. should always be a cushion in Responding to a crisis
liquidity to tide the business
The larger of the two airports, it will To preserve cash flow, the salaries of
be located approximately 35km from over in case of unexpected approximately 5500 airport contract
CSMIA in Navi Mumbai, a satellite city disruptions. “ workers and about 1500 MIAL staff
of the Mumbai metropolis and home were suspended for two months.
to mega infrastructure projects and a Pre-pandemic, getting the Navi “We have not sacked any workers, but
burgeoning real estate market since its Mumbai airport project off the ground they are getting reduced hours and
creation in the early 1970s. The airport was among the greatest challenges for wages,” says Jain.
was originally expected to open in Jain.
2021, but the deadline has now been
pushed back to 2023-24.

Jain acknowledges that COVID-19
has been a significant stumbling block
for the Navi project, but is hopeful
that it will not need to be postponed
any further. “There may be a surge in
demand for travel much earlier than we
are expecting,” he says. “A lot of the
land development work has been done
– we have cut hills and filled the site. I
think it will be the best airport in India
because of its unique location. Plus,
the city is growing around that area. It’s
the future of Mumbai.”

Stemming the flow

Jain started his career as a management
trainee with the MP Birla Group, before
moving into the telecom and aluminium
manufacturing industries. He joined
MIAL in 2006 as the company’s first
employee.
“I was always in infrastructure, and
an airport is a form of infrastructure,
although it is quite different to running

www.cma-srilanka.org | Volume 06 - No. 2 - September 2021