Adani, GMR bid for 6 non-metro airports listed for privatization

  • The Airports Authority of India received a total of 32 bids in the latest round of airport privatization
  • Crisil had said that it expects the development of these six airports to attract potential investments worth $1.4 billion

India’s Adani Group and GMR Infrastructure Ltd have bid for all the half-a-dozen non-metro airports put up for privatization by the Union government, said two people aware of the development on condition of anonymity.

Indian airport operator GVK and Singapore’s Changi Airports International (CAI) did not participate in the just concluded round of bidding. The Airports Authority of India (AAI) has received 32 bids for the airports in Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru, said the people cited above.

Ahmedabad and Jaipur airports received the most number of bids—seven each. The bidders are Adani, GMR, Sydney-based investment manager AMP Capital, PNC Infratech Ltd, Autostrade India (a unit of Italy’s Atlantia SpA) and Prem Watsa’s Fairfax India Holdings Corporation, besides a consortium comprising the National Infrastructure and Investment Fund (NIIF) and Flughafen Zurich AG, the operator of Zurich airport, the first person mentioned above said.

The same parties, excluding the NIIF-Flughafen Zurich combine, placed bids for Guwahati airport, while for Lucknow, of the seven, AMP Capital did not place a bid.

Adani, GMR and Cochin International Airport Ltd (CIAL) were the only three bidders for the Mangaluru airport, the second person said, adding Adani, GMR and Kerala State Industrial Development Corp. Ltd (KSIDC) bid for the airport in Thiruvananthapuram.

“Mangaluru and Thiruvananthapuram airports received fewer bids than the others. In the case of Mangaluru airport, its catchment area has reduced with the Kannur International Airport coming up in north Kerala," the second person said. “In the case of Thiruvananthapuram, the Kerala government has the first right of refusal if it is willing to make an offer within a 10% range of the highest bidder."

“Given that each of the airports have received a minimum of three bidders, the privatization process has, in fact, gotten fair response, despite the crunched timelines that bidders have had to work under," the second person added.

“We’ve received 32 bids in all. The technical scrutiny is going on. There are thousands of documents that we have to go through that pertain to qualifying categories in terms of financial performance and past experience in infrastructure projects," said Guruprasad Mohapatra, chairman, AAI.

GVK, the concessionaire for the Mumbai international airport and the developer of the upcoming Navi Mumbai airport, was a key absentee in the latest round of airport privatization.

However, Mohapatra said: “The number of bids for each airport in this case were much higher than what the AAI had received in 2016 for greenfield airports at Navi Mumbai and Mopa (Goa), where there had been only two bids each." Adani and GMR spokespeople declined to comment.

In November, the cabinet had cleared the privatization of the six airports under the public-private partnership model. The airports are currently run by the AAI. In a departure from the model used in the first round of airport privatization more than a decade ago, the AAI sought bids for the operations and maintenance of these airports for a concession period of 50 years. The winning bid will be decided on the basis of the highest monthly per-passenger fee that the concessionaire will offer to the AAI. This is a departure from the revenue-sharing model that the AAI had adopted in the existing privatized airports such as Delhi, Mumbai and Bengaluru.

Rating agency Crisil had said that it expects the development of these six airports to attract potential investments worth $1.4 billion, with each roughly needing investments of $200 million.

The last date for submission of bids was 14 February. The financial bids will be opened on 25 February and the letter of award will be issued on 28 February.

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