13 more airports to be privatised
To counter mounting losses, the government has decided to privatise 13 more airports now managed by the Airports Authority of India, with the bidding for those (for 50-year leases) expected to be completed by the end of the current fiscal.
The Airports Authority of India (AAI), to pare down losses, which ramped up to Rs 1,962 crore in financial year (FY) 2020-21—and as a result of which it was forced to borrow Rs 1,500 crore from State Bank of India to meet working capital requirements, including salaries—has decided to privatise, or more technically, give out on a 50-year lease, 13 airports. The list has been sent to the Union Civil Aviation Ministry, it has been learnt.
To make the deals more attractive, six big airports would be clubbed with seven smaller ones: Varanasi with Kushinagar and Gaya; Amritsar with Kangra; Bhubaneswar with Tirupati; Raipur with Aurangabad; Indore with Jabalpur; and Trichy with Hubli.
This means that whoever bids for one of the six bigger ones would get the smaller airport clubbed with it.
AAI Chairman Sanjeev Kumar, while speaking with a media outlet, said that despite the COVID-19 pandemic, the airports will have takers as the pandemic is a short-term event and the leases are for a long term of 50 years.
Kumar also said that the airports are to be bid out on the public-private partnership (PPP) model, and the bidding parameter (determining the amounts to be bid by the parties) will be the per-passenger fee (PPF), which has been used before and which was also the model used for the upcoming Jewar Airport in Greater Noida in Uttar Pradesh.
The government had told the Rajya Sabha on February 3 this year that based on the PPF offered by the winning bidder (Adani Group) for the six airports (Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru), AAI will earn Rs 904 crore profit in 2020-21.
This will be the third phase of airport privatisation in the country, and the second by the Modi government. The first phase of privatisation happened in 2005-6 when Delhi, Mumbai, Bengaluru and Hyderabad were handed over to private operators, while the second phase happened in 2019 when Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru were awarded to the Adani Group. Later, the Adani Group also took control of the highly-profitable Mumbai Airport.
According to reports, the government plans to award 25 airports in the next four years, and the 13 mentioned here are part of those 25. The AAI chairman has said that the plan is to complete the bidding of these 13 airports by the end of the current fiscal, that is, by March 2022.
