Govt Will Sell 13 More Airports To Private Firms Based On ‘Clubbing Model’: Full List Of Airports

In what appears as the ‘last opportunity’ for private investors to enter the airport sector of India, the Government-owned statutory body Airports Authority of India has approved the privatisation process for 13 airports.

The effort is on the lines of the National Monetisation Pipeline (NMP), where the government aims to monetise underutilized assets. It must be noted here that the NMP would include only non-core assets.

The government aims to generate about Rs 3,660 crore through private investment in airports by FY24.

For the privatisation process of 13 airports, the AAI has planned to club six major airports along with seven smaller non-profitable ones, to ensure the development of the latter along with the former, once the private sector investment and participation comes into play.

Airports to be Privatised

As a part of the National Monetisation Pipeline, the AAI has approved the privatisation process of 13 airports in India, of which six are major airports, while seven are small non-profitable ones.

The six major airports approved by AAI are:

• Bhubaneshwar, 
• Varanasi, 
• Amritsar, 
• Trichy, 
• Indore and
• Raipur

The seven smaller ones are:

• Jharsuguda, 
• Gaya, 
• Kushinagar, 
• Kangra, 
• Tirupati, 
• Jabalpur and 
• Jalgaon

While Jharsuguda airport will be bundled with Bhubaneswar, Kushinagar and Gaya airports will be clubbed with Varanasi. Kangra, Amritsar, Jalgaon and Trichy airports will be clubbed with Raipur Jabalpur, Indore, and Tirupati airports, respectively, states BS.

The AAI is currently working on appointing a consultant to prepare the bid document and determine the concession period and reserve price. The bids are likely to be called by early 2022.

Views on Viability of Clubbed Privatisation Plans

In a first model of clubbing major airports with smaller ones to present for the privatisation exercise of airports, the NMP document prepared by Niti Aayog reads, “To ensure commensurate development of non-profitable airports along with the profitable airports with the help of private sector investment and participation, pairing /clubbing of smaller airports with each of the six bigger airports and leasing out as a package is being explored.”

The director of Crisil, while speaking on the privatisation plan states that the mulled plan for privatisation could be the last chance for interested investors to join the Indian airport sector.

He adds that assured returns on aero assets will (predictably) push some existing players to increase their scale rather than allowing fresh entrants and competition.

Prospective investors and consultants said airports would see good participation from bidders, though there will be pressure on valuation.