Modi government may lease out 10 airports including Varanasi, Patna, Amritsar under PPP model

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Updated: July 26, 2019 4:31:28 PM

Unlike the last round, the probable list for privatisation includes loss-making airports like Indore and Raipur

Privatisation of airports, Civil Aviation ministry, PPP model, GMR group, Airports Authority of India, Adani EnterprisesA senior government official said that most of these airports would make it to the privatisation list planned for this year. (Reuters photo)

Buoyed by high investor interest in privatisation of six airports recently, the civil aviation ministry could lease out a total of 10 airports, which include the ones at Varanasi, Calicut, Patna, Amritsar and Bhubaneswar, among others, under the public-private partnership (PPP) model later this year. Airports at Ranchi, Coimbatore, Trichy, Indore and Raipur are also on this list.

These facilities are currently managed by state-owned Airports Authority of India (AAI), and witnessed traffic of 1.57-4.15 million passengers in FY19. Unlike the last round, the probable list for privatisation includes loss-making airports like Indore and Raipur.

The ministry had bid out profit-making airports at Ahmedabad, Jaipur, Lucknow, Trivandrum, Guwahati and Mangalore in February 2019 on the basis of highest per-passenger fee (PPF) offered to the AAI. The bidders got rights to operate, manage and develop airports for a period of 50 years. The PPF criteria is likely to continue as the bid parameter.

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A senior government official said that most of these airports would make it to the privatisation list planned for this year. “There is significant interest from investors in the airports development sector. We are working with a list of 10 airports. We hope to lease out most of them if not all,” the official told FE.

The ministry has directed the AAI to analyse the attractiveness and constraints of these airports before finalising the units for sale. It is simultaneously holding feedback discussions with bidders who participated in the last sale process. Experts believe there is a strong appetite among investors for brownfield airports which was reflected in the sale of six airports.

“There is significant interest amongst both investors community and airport operators. There will be aggressive bidding for it. Leasing out more airports soon would reflect continuity on the part of the government,” Jagannarayan Padmanabhan, director, CRISIL Infrastructure Advisory, pointed out.

The last round of airport privatisation witnessed aggressive bidding from 10 players, including GMR group, infrastructure major Adani Enterprises, and strategic investors like AMP Capital and National Infrastructure and Investment Fund. The Adani group emerged as the highest bidder for all six airports and has received the cabinet approval to operate Ahmedabad, Lucknow and Mangaluru airports so far.

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