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6 airports get Centre’s nod for privatisation; AAI to hold a minor stake
News:
- The government has decided for operation,management and development of six airports through a public-private partnership (PPP) model of six airports.
Important Facts:
- The chosen airports are of Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati.
- This comes 12 years after Delhi and Mumbai airports were privatised in 2006.
- 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.
- 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.
- 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.
- 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.
