With the next general elections months away, UPA-II has decided to fast-track the privatization of six more AAI airports — Chennai, Kolkata, Lucknow, Ahmedabad, Jodhpur and Guwahati — like the four metro airports that are now running under PPP (public-private-partnership) model.
The aviation ministry will start issuing request for qualification (RFQ) from next week to private bidders to “operate, maintain and develop” these airports on a revenue-share model with AAI for a concession period of 30 years.
However unlike the PPP airports in Delhi, Mumbai, Hyderabad and Bangalore, AAI will not be asked to invest anything in the private companies that will bid to run the six airports as the ministry has decided to allow the private players to have 100% stake. AAI has a 26% stake in Delhi and Mumbai and 13% in Hyderabad and Bangalore airports.
Also, in departure from the practice at the four metros, aviation authorities may decide the aeronautical tariff structure for the entire 30 years with inbuilt clauses for escalation when costs go up to give the bidders a clear idea of revenue generation. And, bidders for these six airports may have to retain the entire staff there as after privatization AAI is unlikely to absorb them.
AAI had recently modernized Kolkata and Chennai airports at a cost of Rs 2,325 crore and Rs 2,015 crore, respectively. It has also upgraded both the passenger terminal and operational facilities at the other four airports, which are now being sought to be privatized.
Apart from unions and political parties, the International Air Transport Association (IATA) had also opposed privatization of more airports in India after seeing how the private metro airports have hiked their charges. Delhi, for instance, is now rated among the most expensive airports in the world.
The aviation ministry will start issuing request for qualification (RFQ) from next week to private bidders to “operate, maintain and develop” these airports on a revenue-share model with AAI for a concession period of 30 years.
However unlike the PPP airports in Delhi, Mumbai, Hyderabad and Bangalore, AAI will not be asked to invest anything in the private companies that will bid to run the six airports as the ministry has decided to allow the private players to have 100% stake. AAI has a 26% stake in Delhi and Mumbai and 13% in Hyderabad and Bangalore airports.
Also, in departure from the practice at the four metros, aviation authorities may decide the aeronautical tariff structure for the entire 30 years with inbuilt clauses for escalation when costs go up to give the bidders a clear idea of revenue generation. And, bidders for these six airports may have to retain the entire staff there as after privatization AAI is unlikely to absorb them.
AAI had recently modernized Kolkata and Chennai airports at a cost of Rs 2,325 crore and Rs 2,015 crore, respectively. It has also upgraded both the passenger terminal and operational facilities at the other four airports, which are now being sought to be privatized.
Apart from unions and political parties, the International Air Transport Association (IATA) had also opposed privatization of more airports in India after seeing how the private metro airports have hiked their charges. Delhi, for instance, is now rated among the most expensive airports in the world.
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