New Delhi, Aug. 24 -- The government is preparing to hand over the operation of 11 Airports Authority of India (AAI) airports to private operators under the public-private partnership (PPP) model, with the facilities grouped into five bundles. Each bundle will be awarded to a single concessionaire for a 50-year concession period.
The Civil Aviation Ministry's proposal received in-principle approval from the Public Private Partnership Appraisal Committee (PPPAC) at its meeting on August 4, according to the minutes of the meeting. The committee is chaired by Economic Affairs Secretary Anuradha Thakur.
The proposed bundles pair five major airports with six smaller ones. Amritsar will be grouped with Kangra-Gaggal, while Varanasi will be combined with Gaya and Kushinagar. Bhubaneswar and Hubballi will form another bundle, with Raipur and Aurangabad making up the fourth. Tiruchirappalli and Tirupati will constitute the fifth group.
The total investment expected from the private concessionaires is estimated at Rs 8,622 crore. To limit market concentration and the risks of excessive borrowing by operators, the number of bundles that can be awarded to a single bidder will be capped, the document said. The ministry has also proposed measures to support the transition of existing AAI employees. Once the airports are awarded, there will be a one-year joint management period involving the current workforce. The private operator will then be required to retain 60 per cent of AAI employees for up to three years.
"The previous round of transaction provided for 1-year joint management period and 2-year deemed deputation period," the document said, adding that such arrangements had been acceptable to AAI employees.
The airports were selected through a phased assessment by AAI. Initially, 12 major airports were examined on passenger traffic, land availability, commercial potential, financial performance and airport-specific factors, with six shortlisted for leasing.
AAI subsequently assessed 136 smaller airports for possible combinations, considering traffic potential, capital expenditure, geographical proximity, city-side development potential and financial viability. After evaluating different combinations, the AAI Board approved the proposal for five major and six smaller airports at its May 23, 2022 meeting.
The government had earlier awarded six AAI airports under the PPP model in 2018-19.
Published by HT Digital Content Services with permission from Millennium Post.