Home / News / India /  Govt clears leasing out three airports via PPP

The central government on Wednesday cleared the award of airports at Jaipur, Thiruvananthapuram and Guwahati for redevelopment to Adani Enterprises Ltd.

The Airports Authority of India (AAI) will get 1,070 crore upfront from handing over the airports for redevelopment, Union minister for information and broadcasting Prakash Javadekar told reporters.

“The upfront 1,070 crore that will come to AAI will be used for developing airports in smaller towns. The other benefit is that travellers will get better facilities. It will also improve efficiency," the minister said.

The three airports will be leased for operation, management, and development in public-private partnership (PPP) model to Adani Enterprises, the successful bidder in a global competitive bidding last year, for 50 years, according to a government statement.

These projects will bring efficiency in service delivery, expertise, enterprise, and professionalism, apart from harnessing the needed investment in the sector, it said.

The three airports to be handed over are part of the original six that were auctioned last year, wherein Adani Enterprises emerged as the highest bidder. Contracts for the Ahmedabad, Lucknow and Mangalore airports were signed earlier this year but Adani is yet to take over their operations because of the disruptions from the coronavirus pandemic. The economic disruption and dent in consumer confidence delivered by the pandemic has impacted the revenues of airport operators and their fortunes are linked to a return of confidence in air travel.

Adani Enterprises did not respond to emailed queries from Mint but the company had said earlier this month that there were no changes in the terms of the concession agreement signed for the first three airports due to the coronavirus outbreak, except a six-month additional time sought for the takeover.

“The remaining three airports will also be completed once the first three airports are done," Adani Enterprises’ chief financial officer Robbie Singh told analysts during a call on 6 August.

Airports are leased out to private players for redevelopment on the basis of revenue sharing arrangement with the AAI. In addition to imposing a user fee on passengers, the private developer also has the right to establish new revenue streams through measures such as real estate development around the airport.

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