The Central Government is planning to privatize 13 Indian airports, which are being run by the Airport Authority of India (AAI.)
Taking a crucial step towards the development and privatisation of public run properties, the Central Government is planning to privatise 13 airports by the end of 2021 fiscal year, that is March 2022.
Mr. Sanjeev Kumar, the Chairman of the AAI, recently hinted towards the same and said they have submitted a report to the Central Government. In order to minimise the expenses spent on maintenance and expanding the facilities with privatised services, the AAI listed seven small airports to be connected with six big airports, following which these airports would be headed for auction. The bidding would be as per the per passenger revenue model as it has been used earlier and is a successful method. During the bidding of the Jewar Airport, the AAI used the same model method, which was a success.
Mr. Sanjeev Kumar said, “We have sent a list of 13 airports to the aviation ministry that are to be bid out on PPP (public-private partnership). The plan is to complete the bidding of these airports by the end of this fiscal.
The 13 airports include six big ones and seven small airports. The list is: six big airports are: Kushinagar-Gaya, Kangra, Tirupati, Aurangabad, Jabalpur and Hubli airports.
Seven small airports are: Varanasi Airport, Amritsar Airport, Bhubaneswar, Raipur, Indore and Trichy airports. In addition, the AAI is also planning to merge seven small airports with six big ones, the merger would be like, Varanasi with Kushinagar and Gaya; Amritsar with Kangra; Bhubaneswar with Tirupati; Raipur with Aurangabad; Indore with Jabalpur and Trichy with Hubli.
Besides Tirupati airport, Andhra Pradesh’s two more airports, Vijayawada and Rajamahendravaram airports are also expected to be privatised through bidding.
However, a final decision regarding the privatisation of the aforementioned airports is yet to be taken by the Government of India (GoI.) The major reason behind the privatisation decision is huge losses. The AAI’s earnings dropped drastically due to the Wuhan virus, also known as the Novel Coronavirus pandemic. In the Fiscal Year (FY) 2021, the AAI suffered a loss of Rs.1,962 crores and was forced to borrow Rs. 1,500 crores from the State Bank of India to meet working capital requirements, including salaries.
Meanwhile, it is to be noted, the Centre is aiming to privatise Indian airports run by the AAI since a long time. The GoI has also set a target of bringing in private investment of Rs. 3,660 crores in airports by the financial year 2024.
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