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Cabinet approves proposal to lease out three airports of AAI

The Union Cabinet chaired by Prime Minister Narendra Modi has approved the proposal for leasing out three airports of the Airports Authority of India (AAI) through public private partnership (PPP). The approval was given for leasing out three AAI airports, namely Jaipur in Rajasthan, Guwahati in Assam and Thiruvananthapuram in Kerala for operation, management and development to Adani Enterprises, declared as the successful bidder in a global competitive bidding conducted by AAI, for a period of 50 years. These projects will bring efficiency in service delivery, expertise, enterprise and professionalism apart from harnessing the needed investments in the public sector. The Centre had leased out AAI’s airports at Delhi and Mumbai on PPP for operation, management and development about a decade ago. While these PPP experiments have helped create world-class airports and delivery of efficient and quality services to airport passengers, it has also helped AAI in enhancing its revenues and focusing on developing airports and Air Navigation infrastructure in the rest of the country. The revenue received by AAI from PPP partners enabled it to create infrastructure facilities in Tier-2 and Tier-3 cities and also upgrade their airports to international standards. The PPP airports in India are consistently ranked among the top five in their respective categories by the Airports Council International (ACI) in terms of Airport Service Quality (ASQ). Therefore, the Centre decided to lease out more airports of AAI for operation, management and development under PPP through Public Private Partnership Appraisal Committee (PPPAC). The government also constituted an Empowered Group of Secretaries (EGoS) to decide on any issue falling beyond the scope of PPPAC. PPPAC has approved the transaction documents. The entire bidding process was carried out under the supervision and directions of EGoS which comprised representatives of NITI Aayog, the Department of Expenditure and Department of Economic Affairs (DEA) of the Ministry of Finance (MoF). AAI released request for proposal (RfP) on 14 December 2018 through global competitive bidding wherein per passenger fee is the bidding parameter. The technical bids were opened on 16 February 2019 and the financial bids of the qualified bidders were opened on 25 and 26 February 2019. Adani Enterprises won all the bids by quoting highest per passenger fee for all the three airports.

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