The government is preparing to award 11 airports, including Varanasi and Tirupati, to private players in five bundles under the public-private partnership (PPP) model, according to an official document. The airports will be leased for a concession period of 50 years.
The Civil Aviation Ministry has proposed grouping five major airports with six smaller ones, with each bundle going to a single concessionaire. The Public Private Partnership Appraisal Committee (PPPAC), chaired by Economic Affairs Secretary Anuradha Thakur, gave in-principle approval to the proposal at its Aug 4 meeting.
Five Bundles On The Table
Under the proposal, Amritsar and Kangra-Gaggal airports will form one bundle, while Varanasi, Gaya and Kushinagar will make up another. Bhubaneswar and Hubballi will be grouped together, while Raipur and Aurangabad will form the fourth bundle. Tiruchirappalli and Tirupati will make up the fifth, PTI reports.
The bundling approach is significant because it links major airports with smaller ones rather than offering each airport separately. At the same time, the government plans to cap the number of bundles that can go to a single bidder to reduce risks from market concentration and potential over-leveraging, including any cascading impact across projects.
₹8,622 Crore Investment Expected
The concessionaires taking over the airports are expected to make a total investment of ₹8,622 crore.
The ministry has also proposed a one-year joint management period involving existing Airports Authority of India (AAI) employees after the airports are awarded to private players.
"Further, the concessionaire would be required to retain 60% AAI employees up to 3 years. The previous round of transaction provided for 1-year joint management period and 2-year deemed deputation period.
"Historical evidence suggests that such arrangement with the concessionaire has been acceptable to AAI employees," the document said.
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How The Airports Were Picked
The 11 airports were selected through a phased and data-driven process by AAI, according to the minutes of the PPPAC meeting.
"Initially, 12 major airports were assessed based on passenger traffic, land availability and commercial potential, financial performance, and airport-specific strengths and constraints, of which 6 were recommended for leasing.
"Subsequently, 136 smaller airports were evaluated for possible bundling with the major airports, based on parameters including traffic potential, capital expenditure requirements, geographical proximity, city-side development potential and financial viability," the document said.
After filtering, scoring and assessing different major-small airport combinations, the AAI Board approved a proposal comprising five major airports bundled with six smaller ones at its May 23, 2022, meeting.
The plan marks another round of airport leasing under the PPP model. In 2018-19, the government had awarded six AAI airports under the same model.
