Next Round Of Airport Privatisation To Begin In 1st Quarter Of 2021: AAI

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A file photo of two passengers taking a selfie at the Chhatrapati Shivaji Maharaj International Airport's Jaya He Museum Carnival in 2018. Source: CSMIA/Twitter

Airports Authority of India (AAI) Chairman Arvind Singh has said that the government is planning to hold the next round of privatisation of airports in the first half of 2021. This announcement comes in the wake of the AAI recommending privatisation of airports to the Centre in September.

Airport Privatisation: Next Round

Addressing a media briefing, AAI Chairman Arvind Singh said that the government is planning to hold the next round of privatisation of airports in the first half of 2021.

“As far as the next round of airports’ privatisation is concerned, we are at the final stages of obtaining government approvals. Once the approvals are received, I think we will start the process of bidding in the first quarter of 2021,” he said.

Earlier in September, the AAI had recommended the Centre to privatise airports at Amritsar, Varanasi, Bhubaneswar, Indore, Raipur and Trichy.

Privatisation AAI officials handing over the signed documents for Mangaluru Airport to Adani Group officials
AAI officials handing over the signed documents for Mangaluru Airport to Adani Group officials. Source: AAI

In the first round of airports’ privatisation under the Narendra Modi government, the Adani Group in February bagged contracts for six airports — Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati — winning the bids by huge margins.

After signing the concession agreements for three airports — Lucknow, Ahmedabad and Mangaluru — the AAI handed them over to the Adani group earlier this year. The concession agreements for the remaining three airports would be signed in the first half of next month, Mr. Singh said.

The AAI, which works under the Ministry of Civil Aviation, owns and manages more than 100 airports across the country.

Meanwhile, Business Standard reported that  the government is unlikely to impose a cap on the number of projects a private company can bid for in the upcoming round of airport privatisation, turning down the suggestion of an expert committee.

The Public Private Partnership Appraisal Committee (PPPAC) had earlier recommended restricting the number of airport projects to a maximum of two contracts in each round of auction, to prevent monopoly. But, sources told the newspaper that an empowered group of secretaries (E-GoS) has over-ruled the proposal of the government nominated panel for PPP projects.

The Government of India’s National Policy on Civil Aviation states that privatisation exercise is to provide a market orientation to the present structure, bridge the resource gap and encourage greater efficiency and enterprise in the operation of airports, through the introduction of private capital and management skills.

The Union government’s decision to hand over Thiruvananthapuram airport to Adani group has been challenged legally. “That court decision has come in our favour as the process was done in a very open and transparent manner. The security clearance has also come for (handing over the remaining three airports to Adani Group),” aviation secretary PS Kharola said.

The group will also be taking over Mumbai International Airport Ltd, and the upcoming Navi Mumbai Airport, where it is acquiring a controlling stake from outgoing promoter GVK Group soon.

 


Also Read: Adani Group Begins Airport Takeover With Mangaluru, Lucknow


 

With seven functional airports and a greenfield one (at Navi Mumbai) under its belt, the group will be the biggest private airport operator in India in terms of the number of airports handled.

Adani Enterprises Ltd Chief Financial Officer Jugeshinder Singh said that the company plans to invest about Rs. 50,000 crore in capital expenditure to boost its new businesses over the next five years, with a major chunk of it going towards airports business. The company plans to invest Rs. 35,780 crore in its airport business in the next five years.

Besides privatisation, AAI has also identified six airports at Belgavi, Jalgaon, Kalaburagi, Khajuraho, Salem, Lilabari to set up flying training institutes.

“This would be done on a competitive bidding basis. We have reduced concession fee and other charges to incentivise private operators to set up their shops. AAI will soon come out with a Request for Proposal (RFP) for the same,” Singh said during a previous press conference held by civil aviation minister Hardeep Singh Puri.

 

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Aditya Anand
Deputy Editor, AviatorsBuzz Aditya Anand in his nearly two decades of Journalism experience has tracked Aviation, Travel, and Hospitality closely and reported on it for major publications like The Hindu, Mumbai Mirror, and MIDDAY.