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November 12, 2018

Indian Government clears proposals to privatise six more airports

The Government of India has approved a proposal to manage and develop Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru airports under a public-private partnership (PPP) model.

The Government of India has approved a proposal to manage and develop Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru airports under a public-private partnership (PPP) model.

Indian law minister Ravi Shankar Prasad said that the proposal had been approved ‘in principle’ to hand over the airports to PPP operators that are currently managed by the Airports Authority of India (AAI).

He further added that the government’s experience of managing five airports in Delhi, Mumbai, Bengaluru, Kochi and Hyderabad through the PPP model has been encouraging.

In addition, the government has decided to use the same methodology to manage a further six aerodromes.

A group of secretaries from the Ministry of Civil Aviation and departments of economic affairs and expenditure, headed by NITI Aayog CEO Amitabh Kant will decide the deal’s scope.

“The government seeks to boost passengers’ number from 265 million in 2017 to approximately one billion over the next ten to 15 years.”

The latest government decision is expected to attract more foreign investment in airport infrastructure and deliver efficiency, as well as professionalism in airport service delivery.

PPPs in airport management has enabled the government to gain substantial revenue and use the model for better air connectivity between the country’s cities.

The latest cabinet decision comes 12 years after Delhi and Mumbai airports were privatised.

Civil aviation market in India has been expanding at a rate of 19% over the last four years. It is estimated to be the third largest in the world by 2025, behind the US and China.

The government seeks to boost passengers’ number from 265 million in 2017 to approximately one billion over the next ten to 15 years.

To manage the burgeoning number of travellers, the government has announced plans to start a big airport-building and upgrade project estimated to cost nearly Rs2tn ($27.57bn) over the next ten years.

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