AAI defers plan to privatize Ahmedabad and Jaipur airports after tepid response

Mumbai: The Airports Authority of India (AAI) has deferred plans to privatize the Jaipur and Ahmedabad airports as it could get only single bids for them.

“We have suggested more changes to the privatization proposal for these airports to make them attractive to the bidders,” AAI chairman G.P. Mohapatra told Mint.

The new proposals have been sent to the aviation and finance ministries, who, in turn, are expected to take a decision in the next two to three weeks, he said.

Mohapatra, however, did not elaborate on the terms and conditions of the new proposal.

The government had first come up with the plan to partially privatize Jaipur and Ahmedabad airports in 2014.

However, the efforts hit a rough patch after the AAI’s tender for privatizing terminal operations at these airports during 2017-18 failed to attract bidders because of the stringent terms and conditions of the contract.

Prospective bidders were reluctant then as the scope for generating revenue from airport terminals alone seemed low.

“Issues raised by bidders included stringent performance-related monitoring parameters, a greater say in capital expenditure planning and infusion, and clarity on ownership structure,” an AAI official, who did not want to be named, had earlier told Mint.

AAI relaxed some of the terms in March, including the bidding parameters and the contract period, which was extended to 15 years from the initial 10 years.

However, this, too, failed to attract bidders.

“The revised plans that have been sent to the ministries for approval gives more operational control to the private players,” the AAI official quoted above said on Monday.

Meanwhile, AAI is also working on increasing the capacity at several airports during 2018-19, including the ones at Chennai, Srinagar, Pune, Dehradun, Lucknow, Mangaluru, Jaipur, Goa, Agartala, Guwahati, Leh, Patna, Tiruchirappalli, Vijayawada, Port Blair, Agartala, Kozhikode, Thiruvananthapuram and Jabalpur.