The Public Private Partnership Appraisal Committee has granted in-principle approval for the privatisation of 11 Airports Authority of India airports, which will be offered in five public-private partnership bundles.
The government plans to pair one larger airport with a smaller airport in each bundle. Amritsar, Varanasi, Bhubaneswar, Raipur and Tiruchirappalli will serve as the anchor airports, while Kangra, Gaya, Kushinagar, Hubballi, Aurangabad and Tirupati will be bundled with them.
The approval moves the government towards the next phase of airport privatisation, with bidders set to compete for 50-year concessions. The bidding will be based on a per-passenger fee on domestic traffic, while the government will also place a cap on the number of bundles that a single bidder can win.
The Public Private Partnership Appraisal Committee, or PPPAC, approves major public-private partnership projects in India and comprises senior government secretaries. NDTV Profit accessed the PPPAC document outlining the proposal.
Bundles
The five larger airports - Amritsar, Varanasi, Bhubaneswar, Raipur and Tiruchirappalli - will be paired with the six smaller airports.
Kangra, Gaya, Kushinagar, Hubballi, Aurangabad and Tirupati will form part of the proposed bundles alongside the anchor airports.
Bidding
Bidders will quote a per-passenger fee based on domestic traffic under the proposed model.
The airports will be awarded for a concession period of 50 years. The government will also limit the number of bundles that a single bidder can secure.
The Finance Ministry flagged the "oligopolistic nature" of the aviation sector in its observations on the proposal, according to the PPPAC document accessed by NDTV Profit.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
