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Approved: leasing of six airports under PPP model

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Sought: Aviation Expertise and Professionalism

 

GMR-Hyderabad Airport

The Union Cabinet has approved leasing out of six airports, Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru, under Public Private Partnership (PPP) model of development.

“In-principle” approval for leasing out six airports of Airport Authority of India (AAI) viz. Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru for operation, management and development under PPP through Public Private Partnership Appraisal Committee (PPPAC),” said the Cabinet in a statement on 8 Dec 2018.

Constitution of an Empowered Group of Secretaries headed by CEO of NITI Aayog with Secretary, Ministry of Civil Aviation, Secretary, Department of Economic Affairs and Secretary, Department of Expenditure, is to decide on any issue falling beyond the scope of PPPAC.

Benefits:

PPP in infrastructure projects brings efficiency in service delivery, expertise, enterprise and professionalism apart from harnessing the needed investments in the public sector, said the statement.
The PPP in airport infrastructure projects has brought World-class infrastructure at airports, delivery of efficient and timely services to the airport passengers, augmenting revenue stream to the AAI without making any investment among others.

As such, PPP would be used for development of Greenfield Airports at Hyderabad and Bengaluru.

Presently, the airports being managed under the PPP model include Delhi, Mumbai, Bangalore, Hyderabad and Cochin.

The PPP airports in India have been ranked among the top 5 in their respective categories by the Airports Council International (ACI) in terms of Airport Service Quality (ASQ).

While these PPP experiments have helped create world class airports, it has also helped AAI in enhancing its revenues and focusing on developing airports and Air Navigation infrastructure in the rest of the country.

Background:

The increase in domestic and international air travel in India combined with congestion at most airports, and the strong traffic growth at the 5 airports which were privatized over a decade ago has attracted the attention of several international operators and investors, said the statement.

The airport sector is the top contender among infrastructure sectors in terms of international interest. International operators and investors prefer brownfield airport expansion opportunities with having more than 3-4 million passenger capacity.

The airport sector may provide an immediate opportunity to attract foreign direct investment (FDI) by adoption of a PPP approach.

Therefore, it has been decided to lease out the six airports in the first phase for development, operation and management under PPP.

This is expected to enhance the revenue to AAI and increased economic development in these areas in terms of job creation and related infrastructure, it said. fiinews.com

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