May 22, 2018, 11:36 am IST
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Privatisation of 8 airports draws  blank 

Privatisation of 8 airports draws  blank 

 May 14, 2018

The government’s attempt at privatising maintenance of airport terminals has drawn a blank from investors. This has forced the Narendra Modi government to mull complete privatisation — a plan initiated by the previous United Progressive Alliance government but dropped by the current regime, facing protest from employee unions.

The plan was to privatise at least eight government-owned airports — Chennai, Kolkata, Kochi, Pune, Ahmedabad, Jaipur, Lucknow and Guwahati.

The Civil Aviation Ministry is having discussions on designing the model on how the airports would be bid out, according to sources. It is likely the airports will be bid out for 30 years and the tariffs will be fixed upfront.

Graph Officials said the model of bidding will be distinctly different from the process followed for Delhi and Mumbai airports. 'We are now looking at a model where airports can be privatised on the basis of fixed tariff,' a government official said.

In the case of privatisation of Delhi and Mumbai airports, a bidder was selected on the basis of the highest share of revenue offered to AAI from the gross revenues of the airport. This reduced the scope of return on investment for the developer, leading to an increase in tariff for compensation.

'We welcome the government’s move. Fixing the tariff upfront will bring regulatory clearance and encourage foreign airport developers to invest in Indian airports,' said Mr. Satyan Nair, secretary general, Association of Private Airport Operators.

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