Taoyuan Airport: Ultimate Goal Should Be Privatization

Taoyuan Airport: Ultimate Goal Should Be PrivatizationUnited Daily News editorial (Taipei, Taiwan, ROC)
A Translation
September 1, 2010

Scandals surrounding the Taoyuan Airport have monopolized the headlines recently. These scandals have opened up a bottomless black hole. No one knows where it will end. This reveals a problem with the system that mere personnel changes can never resolve. Perhaps airport operations should be corporatized as the first step in reform. But the ultimate goal should be privatization.

The operation and management of a public utility such as an airport involves both economics and management structure. Flight safety, noise pollution, and land use considerations impose severe geographical limitations, limiting where an international airport may be built. Add to this a high degree of dependence on the economies of scale in airport operations. The overhead cost of airline counters is inversely proportional to the number of flights scheduled. Airports are inherently monopolistic. Public utilities are not necessarily public monopolies. But airports involve immigration controls, customs, inspections, quarantines, and other forms of public authority. Together, they have led to the current operating structure.

Customs operations aside, an airport is essentially a service industry. Managing a service organization using the government administration methods hobbles it from the outset. Well known problem areas include government procurement and personnel appointments. Performance appraisal systems for government administrations are incapable of indicating the quality of service provided. The absence of economic incentives makes it impossible to improve quality and reduce costs. As a result, limitations inherent in the structure of government administrations, an inappropriate management structure, the absence of competition within a government monopoly, and the hypocrisy and indulgence of individual managers, mean that Taoyuan Airport was doomed from the outset.

Other governments have considerable experience restructuring entities such as Taoyuan International Airport. The first step is usually "unbundling." This involves drawing clear lines of separation between the exercise of public authority and the provision of services. The latter can be managed using flexible organizational and management structures. The corporatization of Taoyuan Airport is the result of such thinking. We all agree that corporatization is the first step to solving Taoyuan Airport's problems. But this will not save Taoyuan Airport. Many other conditions and requirements must be met. But compare this to what we have now. Corporatization means at least a board of directors and a corporate charter. At least it means a form of management more in line with a service industry. At least it means personnel appointments will be easier. The company must not replicate the existing management structure and transfer its personnel without any fundamental changes. Especially since the Government Procurement Law and the Budget Law will still apply. Such a move would do little to solve problems. It might even create more problems. The Ministry of Transportation and Communications has considerable experience in this regard with the Grand Hotel. Could the board be reduced to a public company routinely used for political patronage? We will have to wait and see.

In this regard, the second step foreign governments take during reform is the privatization of state operated airports. Privatization once led structural reforms on Taiwan. But after Taipei became a member of the World Trade Organization (WTO) in 2002, its importance was forgotten. In July of this year, the WTO evaluated our government's trade policy for a second time. The EU Vice Ambassador to the WTO who was responsible for the evaluation spoke frankly. Taipei must review its privatization policies, he said, because in recent years they have come to a standstill. Monopolistic public services lack market competitiveness. Actually one can still use benchmarks to compare the operational efficiency of different airports. Such benchmarks would have the same effect as market competition. After privatization, legally mandated contracts will be needed to avoid monopoly price abuses and to maintain the quality of service. The structural problems inherent in public companies long ago forced OECD countries to make airport privatization mainstream policy.

We suggest that the government refer to Tokyo's Narita Airport. Taking one step at a time, it set privatization as its ultimate goal. It established the necessary outside conditions. Meanwhile, the state operated airport company has a transitional task. It must conduct institutional consolidation and establish commercial business operations. It must preserve the value of the company until it is privatized.

Finally, the Taoyuan Airport model must be applied to similar structural reforms for the Port Authority and Ports Corporation. Such systemic changes address more than short-term problems. They contribute to long-term national efficiency and competitiveness.

桃園機場應以民營化為終極目標
【聯合報╱社論】
2010.09.01 03:20 am

桃園機場的各種弊端問題，連日來占據新聞版面，彷彿是個無底黑洞，不知盡頭何在。這顯示出這已經是個制度性問題，不是換人就能解決。機場營運改為公司化，或許只是制度改革的第一步，民營化才應是最終目標。

關於機場這個公用事業之營運管理體制的討論，其實是一個經濟與治理結構的問題。由於飛航安全、噪音與用地等考慮，能夠興建國際機場的地理區位非常有限，再加上機場營運具有高度的規模經濟性質（航空公司分攤的成本與航班數量呈反比），因而機場往往有高度的獨占性。固然獨占公用事業與公營並無直接關聯，但因機場又涉及出入境管理、海關、檢驗、檢疫等公權力行使的業務項目，二者相加後，便產生出目前以行政機關形式經營的結構。

然而，除了境管業務外，機場本質上是個服務業；以行政機關組織作為服務業的治理基礎，先天上就已有許多限制。除了政府採購、人員任用等眾所周知的問題外，行政機關的績效評估制度基本上難以反映品質的好壞，又無經濟上的誘因來提升品質及降低成本。於是，行政機關的先天限制、錯置的治理結構，及獨占事業的缺乏競爭，最後再加上個別主管的鄉愿與姑息，桃園機場的命運已經注定。

對於類似桃園機場的治理結構革新，國際間有很多經驗。第一步通常是所謂的結構拆解（unbundling），把涉及公權力行使的項目，與屬於服務業的業務分離並劃清界線。對於後者，可採取靈活彈性的組織與治理結構進行管理。桃園機場的公司化，就是此一思維的產物。我們都同意公司化是解決桃園機場的第一步，然而這是否就是桃園機場的救贖，恐怕還要有很多條件與配套始能搭配滿足。相較於現狀，確實公司化後至少可透過董事會組織、公司章程等規範基礎，建立更符合服務業本質的治理架構，且在人事上可更有彈性。然而，倘若公司化只是將現有管理結構與人員平行轉移，而無根本的變革與調整，且新公司又無法排除政府採購法與預算法的適用，那麼此舉除了解決問題的能力受限外，是否會製造出更多的新問題（交通部在圓山飯店已有相當經驗），如董事會是否會逐漸淪為酬庸等公營公司常見的流弊，還有很多待觀察之處。

對此，國際間改革的第二步，就是公營機場公司的民營化。民營化在台灣結構改革的歷史上，曾經引領過風潮；但在二○○二年加入世界貿易組織（ＷＴＯ）後，重要性逐漸被忘卻；今年七月間我國在ＷＴＯ接受第二次貿易政策檢討時，擔任評論人的歐盟駐ＷＴＯ代理大使便直言，台灣需要重新檢討近年來幾乎停頓的民營化政策。獨占的公用事業因欠缺市場競爭（實際上仍可透過不同機場間經營績效的標竿比較，產生類似競爭的效果），因此民營化後對於價格與服務品質等方面，須要仰賴法律強制規定與委託契約條款，避免獨占事業濫用其獨占地位。即便如此，由於公營公司的結構性問題，機場的民營化早已成為ＯＥＣＤ國家的主流政策。

我們建議政府應參考東京成田機場的改革經驗，在分步到位的原則下，將機場公司的民營化明確列為最終目標，並開始籌劃相關外部規範之建立。同時，公營機場公司的階段性任務，應在進行體制整頓與建立商業運作制度，以確保民營化時的價值與接手意願。

最後，桃園機場的改革模式，有必要擴大至港務局與港務公司等類似結構的改革；蓋此種制度調整，不僅是為了解決短期問題，更是為了國家長期整體的效率與競爭力。