Govt To Lease 11 Airports To Private Players For 50 Years

The government is set to award 11 airports to private players in five bundles under the public-private partnership (PPP) model. The airports will be leased for a concession period of 50 years. The Civil Aviation Ministry has proposed grouping five major airports with six smaller ones, with each bundle going to a single concessionaire.

The five bundles include Amritsar and Kangra-Gaggal airports, Varanasi, Gaya and Kushinagar, Bhubaneswar and Hubballi, Raipur and Aurangabad, and Tiruchirappalli and Tirupati. The bundling approach is significant because it links major airports with smaller ones rather than offering each airport separately.

The Public Private Partnership Appraisal Committee (PPPAC), chaired by Economic Affairs Secretary Anuradha Thakur, gave in-principle approval to the proposal at its August 4 meeting. The concessionaires taking over the airports are expected to make a total investment of ₹8,622 crore.

The ministry has also proposed a one-year joint management period involving existing Airports Authority of India (AAI) employees after the airports are awarded to private players. The concessionaire would be required to retain 60% AAI employees up to 3 years.

The 11 airports were selected through a phased and data-driven process by AAI. Initially, 12 major airports were assessed based on passenger traffic, land availability and commercial potential, financial performance, and airport-specific strengths and constraints. Subsequently, 136 smaller airports were evaluated for possible bundling with the major airports.

The plan marks another round of airport leasing under the PPP model. In 2018-19, the government had leased out six airports, including Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram, and Mangaluru, to private players.

The government plans to cap the number of bundles that can go to a single bidder to reduce risks from market concentration and potential over-leveraging. The move is expected to bring in private investment and improve the efficiency of airport operations.

The airport leasing plan is part of the government's efforts to privatize and modernize the country's airport infrastructure. The move is expected to have a positive impact on the aviation sector and the economy as a whole.

The government's decision to lease out airports to private players is a significant step towards improving the country's airport infrastructure. With the expected investment of ₹8,622 crore, the airports are likely to see significant upgrades and improvements in the coming years.

In conclusion, the government's plan to lease out 11 airports to private players is a major development in the aviation sector. The move is expected to bring in private investment, improve efficiency, and modernize the country's airport infrastructure. With the concession period of 50 years, the private players are likely to make significant investments in the airports, leading to improved services and facilities for passengers.