Sunday , January 17 2021

6 airports notified by the Center for privatization; AAI to have a smaller share



On Thursday, the government decided to privatize six airports. Those who have been selected for operation, management and development through public-private partnership (PPP) are Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram and Guwahati.

This occurred 12 years after privatization of Delhi and Mumbai airports in 2006. The decision was taken at a meeting of the Union Cabinet. "After the modernization of airports in Delhi and Mumbai through the PPP model, we saw a significant improvement in the quality of airports. Tourist flows have also increased, so we decided to develop six more airports under this model," said Minister of Justice and Justice Ravi Shankar Prasad . The Group of Secretaries of the Department of Civil Aviation and the Department of Economic Affairs and Expenditure, led by NITI Aayog, Executive Director of Amitabh Kant, will determine the sales contours. Sources in the government said that they would be offered 30 years, and the selected private player would have a controlling stake. "The Airport Authority of India (AAI) will have a smaller share, just like at Delhi and Mumbai airports. A private player will have at least 75% stake," said an evolving official. The offer will take place in the revenue sharing model, whereby providers must pay a certain proportion of the gross income of AAI. This is known as a concession fee. The bidder quoting the highest fee wins. The same model was followed during the privatization of airports in Delhi and Mumbai.

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In accordance with the agreement, the GMR in New Delhi must distribute 45.99 percent of its revenue each year annually.

The GVK, which operates the Mumbai airport, has 38.7 percent of its revenue. The AAI's profit is largely the result of the revenue it deserves from these two airports. With GMR and GVK, it earned around 100 billion euros. Professional experts believe that the airports selected for privatization will receive attractive offers. "The offer is likely to attract a good response from global operators, as all six airports are growing rapidly, with solid collection areas and small uncertainties. The concession fee is probably higher than the limited profit currently earned by AAI due to a number of administrative constraints. for the development of an inland airport, "said Amber Dubey, head of airborne and defense equipment at KPMG's advisory company.

6 airports notified by the Center for privatization; AAI to have a smaller share

The government announced a plan to launch a massive aerodrome and superstructure project in order to cope with the Indian sky. This would in the next ten years amount to a total expenditure of approximately $ 2 trillion, which would be prepared for 1 billion flights a year. The government expects the lion's share of the investment to come from private players. The decision to change the privatization model comes after AAI's plans to stop operations and maintenance of airports in Ahmedabad and Jaipur ended with a standstill. Industrial sources said private players stay away, as O & M airport terminals were found unattractive. According to this model, only some activities, such as the maintenance of terminals and car parks at Jaipur and Ahmedabad airports, were left to private developers. Heads of large airport developers welcomed the decision Thursday, but warned that investing in appetites will depend on the terms of sale. "If the terms of the sale are simple and attractive, the suppliers will be very interested. We will get details and make a decision," said R K Jain, Executive Director of the International Airport in Mumbai.

There are six airports

  • Lucknow
  • Ahmedabad
  • Jaipur
  • Mangaluru
  • Thiruvananthapuram
  • Guwahati


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