The government is planning to limit the number of bids by a single company during the upcoming privatisation of airports in the country.
The move will be aimed at preventing the monopoly of a single company in the aviation sector to avoid any situation like the IndiGo crisis last year, The Economic Times reported.
There are about 11 airports in the country awaiting privatisation. During the last phase of the privatisation exercise in 2018, six airports were put on the block.
Adani Enterprises was the biggest beneficiary at that time as there was no such limit on bids. The company had placed better bids than other players for all six airports. In some cases, Adani’s bid was twice as high as the second-highest bid for the airport.
The company currently operates seven airports in the country, including Mumbai, Navi Mumbai, Ahmedabad, Lucknow, Jaipur, Guwahati, and Trivandrum.
Airports of Amritsar, Varanasi, and Bhubaneshwar are among the 11 airports to be privatised in the upcoming phase.
According to officials cited in the report, the government is holding discussions to finalise the bidding rules to encourage competition and prevent the monopoly of a single entity in the sector.
However, there are concerns in policy circles that placing a strict limit on the number of bids may discourage participants from making higher bids, which would ultimately lower the auction proceeds for the government.
To ensure participants’ interest in the bidding process, one of the proposals under consideration is to allow a company to get at most two blocks, that is four airports, at a time.
If the same company emerges as the highest bidder for the third block of airports, then the second-highest bidder will be allowed to match the bid price.
According to the report, the Ministry of Civil Aviation and the NITI Aayog are working on the final proposal to be placed before the Public Private Partnership Appraisal Committee (PPPAC), the government body appointed to approve large-scale infrastructure privatisation.
