introduction — fasid - ICAO Public Maps

II-E-4
31. International cooperation in the provision and
operation of air navigation services is particularly encouraged
in ICAO’s policies.
Availability of financial data essential
for cost recovery and infrastructure financing
32. When financing for airports and air navigation
services infrastructure is being sought it is important to be
able to demonstrate that the providers of airports and air
navigation services in the State concerned employ efficient
and effective accounting systems permitting the identification
and inclusion of all relevant costs in the cost basis for airports
and air navigation services charges. This is particularly
relevant where prospective sources of financing are commercial
banks or other commercial financial institutions, which
place emphasis on evidence of sound financial management
so as to be provided with added assurance that a loan granted
by them can be serviced and repaid by the recipient.
33. Also relevant in the context of financing airports and
air navigation services is demonstration of the ability to draw
up a financing plan. The plan should provide such basic
information as estimates of component costs (labour, materials,
etc.); the funds required at various stages; currencies in which
payments are to be made; the sources from which the funds are
to be forthcoming (self-generated and/or provided by others)
including terms, and repayment (origin of funds used). It should
be stressed that the availability of a financing plan is a
prerequisite for meaningful negotiations with a commercial
financing institution.
Cost-benefit analysis and development
of business cases
34. Cost-benefit analysis is used to estimate the
economic viability of a planned investment project, that is the
extent to which the total benefit from the investment exceeds
its total cost. CNS/ATM is more complex than most projects
and consists of a package of investments.
35. A recommended approach to cost-benefit analysis
of CNS/ATM is that of Net Present Value (NPV). This means
making predictions of the future profiles of the annual costs
and benefits associated with the implementation of CNS/ATM
systems. Once all the year-by-year expenditures and benefits
are established, the net benefit (benefit minus cost) for each
year can be calculated and discounted back to the base year in
accordance with standard accounting practices.
AFI FASID
36. The development of business cases for the
implementation of CNS/ATM systems involves taking costbenefit
analysis a step further. The business case evaluation
should include the impact on revenues of changes in en-route
charges associated with the implementation of the system.
Such analysis will also provide the yearly funding profiles for
each State, subregion or the region concerned depending on
the implementation strategy adopted. The overall socioeconomic
benefits of an improved aviation infrastructure are
difficult to quantify. Nevertheless, States may also wish to
consider these benefits in their overall analysis.
Sources of financing and financing mechanisms
37. Funding for airports and air navigation services may
originate from a variety of sources, six of which are listed
below:
a) contributions from government (national or foreign);
b) commercial sources (debt financing);
c) accumulated excess of revenues over costs (profits);
d) bonds;
e) equity financing (share capital); and
f) leasing.
38. In addition to these six basic sources, combinations
of these may be used; there may be also other options for the
funding of airports and air navigation services in general.
National organizational and
international cooperative issues
Autonomy at the national level
39. There has been a trend over recent years towards air
navigation services and airports being operated by autonomous
authorities established specifically for that purpose.
40. An autonomous authority refers to an independent
entity or body established for the purpose of operating certain
facilities and providing specific services, and being granted
operational and financial freedom to carry out its functions.
Autonomy can take many forms and does not necessarily mean
privatization (although privatization is one form of autonomy)
since ownership can rest in public or private hands or a mixture