Per passenger fee – know about aviation ministry’s unique new bidding criteria for privatisation of six airports

By: | Updated: December 16, 2018 7:52 AM

The ministry of civil aviation has announced per passenger fee as the bidding criteria for the privatisation of six airports—Ahmedabad, Jaipur, Lucknow, Guwahati, Trivandrum and Mangalore.

airport, aviation sector, aviation industryIt will be a single-stage bidding process opened till February 14, 2019.

The ministry of civil aviation has announced per passenger fee as the bidding criteria for the privatisation of six airports—Ahmedabad, Jaipur, Lucknow, Guwahati, Trivandrum and Mangalore.

According to the request for proposal (RFP) document released on Friday, the bidder quoting the highest per-passenger fee for domestic travellers will be awarded the rights to operate, manage and develop the six non-metro airports.

“The Concessionaire shall broadly be responsible for operations and management of the existing airport assets, as well as for designing, engineering, financing, construction and development of the further/additional air-side, terminal, city-side and land-side infrastructure for the Airport,” the RFP document said. All the six airports are profit making entities for the government.

The government had bid out airports like Delhi and Mumbai on revenue sharing basis with the state-owned Airports Authority of India holding 26% stake. Under the latest document, the airports will be leased out for a period 50 years instead of 30 years in the last privatisation process.

“Per-passenger revenue criteria is better than revenue sharing model. It is difficult to become viable for airports if there is high revenue sharing with the AAI,” an airport industry executive told FE.

This will be second round of airport privatisation in the country after Delhi, Mumbai, Hyderabad and Bengaluru aerodromes were opened for private investment 12 years ago.

It will be a single-stage bidding process opened till February 14, 2019. The government has set the minimum net worth for bidders Rs 1,000 crore.

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