6 airports get Centre’s nod for privatisation; AAI to hold a minor stake

6 airports get Centre’s nod for privatisation; AAI to hold a minor stake

News:

1. The government has decided for operation,management and development of six airports through a public-private partnership (PPP) model of six airports.

Important Facts:

2. The chosen airports are of  Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati.
3. This comes 12 years after Delhi and Mumbai airports were privatised in 2006.
4. The Airports Authority of India (AAI) will hold a minor stake, just like it does at the Delhi and Mumbai airports. The private player will hold at least 75 per cent stake.
5. The bidding will be held in a revenue-sharing model, where bidders are required to pay a specified share of gross revenue to the AAI.
6. This is known as the concession fee. The bidder who quotes the highest fee wins it. The same model followed was during the privatisation of Delhi and Mumbai airports.
7. Background:

• The decision to change the model of privatisation comes after the AAI’s plans of handing over only operation and maintenance (O&M) of airport terminals at Ahmedabad and Jaipur ended in a stalemate.
• Moreover great improvement in the quality of the airports and tourist inflows was observed aftermath the modernisation of airports in Delhi and Mumbai through the PPP model.
• The government has announced a plan to start a massive airport-building and upgrade project. This would entail a total expenditure of about Rs 2 trillion over the next 10 years, preparing it to handle 1 billion air trips per year.