Government may restrict the number of airports an operator can get under the public-private partnership (PPP) model in the next round following the Adani Group’s successful bid for six government airports offered for sale. In the last phase of privatisation, the government had relaxed the bid conditions allowing companies with no prior experience in airport development to participate in the bidding process.
The Gautam Adani-led Adani Enterprises emerged as the highest bidder to operate, manage and develop the six profit-making airports owned by Airport Authority of India (AAI) in February 2019. While the Adanis had been given the letter of award for Lucknow, Ahmedabad and Mangalore airports, the Cabinet nod for Guwahati, Jaipur and Thiruvananthapuram airports is still awaited.
On July 26 it was reported that the AAI could lease out airports at Varanasi, Calicut, Patna, Amritsar, Bhubaneswar, Ranchi, Coimbatore, Trichy, Indore and Raipur. The ministry is planning to invite the expression of interest for sale by the end of 2019. These facilities witnessed traffic between 1.57-4.15 million passengers in FY19. Unlike the last round, the probable list for privatisation includes loss-making units like Indore and Raipur.
While the GMR group owns airports at Delhi and Hyderabad and won the development rights for Mopa and Bhogapuram facilities, the GVK group operates the Mumbai airport and is developing a greenfield airport in Navi Mumbai. Prem Watsa-owned Fairfax India Holding operates the Bengaluru airport.
A total of 10 companies, including foreign entities like Autostrade, AMP Capital Investors (UK), Mauritius-based I Investments, and sovereign wealth fund National Investment and Infrastructure Fund (NIIF). A senior government official said the government wants to have more operators in the airport development sector since the last round saw only Adani break the monopoly of GMR and GVK.
The official said that the ministry received lot of suggestions on improvements in the airports sale process under the PPP model. In the next round, the government would look at capping the number of airports a bidder can get. This would ensure more operators in the sector.
Other suggestions include having a longer duration of sale process and increase in financial threshold for participating bidders.
Source: Financial Express