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Centre aims to privatise 13 airports by March, list sent to aviation ministry

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Centre aims to privatise 13 airports by March, list sent to aviation ministry

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The government plans to complete the privatisation process for 13 airports run by the state-owned Airports Authority of India (AAI) by the end of this fiscal year.

“We have sent a list of 13 airports to the aviation ministry that are to be bid out on PPP (public-private partnership). The plan is to complete the bidding of these airports by the end of this fiscal,” AAI chairman Sanjeev Kumar told ET in an interview.

“The model to be followed for bidding would be the per-passenger revenue model. This model has been used earlier and is successful and the Jewar airport (in Greater Noida) was also bid out on the same model,” he said.

There will be takers for these projects despite Covid, as the impact of the disease is short term and the airports are on offer for 50 years, he said.

AAI has decided to club seven small airports with six big ones–Varanasi with Kushinagar and Gaya; Amritsar with Kangra; Bhubaneswar with Tirupati; Raipur with Aurangabad; Indore with Jabalpur; and Trichy with Hubli.

AAI to Focus on New Airports

As part of the National Monetisation Plan (NMP), the government plans to award 25 airports in the next four years, including the above 13. This follows the six awarded to the Adani Group in 2019 at the beginning of the second phase of privatisation after the airports of Delhi, Mumbai, Bengaluru and Hyderabad were handed over to private operators in 2005-6.

The government’s plan is to liberalise the sector with the privatisation of profit-making airports. AAI’s mandate will be expanded to develop new ones in areas where the private sector may not want to venture through profits earned through revenue share from the privatised airports.

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AAI’s earnings took a hit from Covid. It posted a record loss of Rs 1,962 crore in FY21 and was forced to borrow Rs 1,500 crore from State Bank of India to meet working capital requirements, including salaries. With the situation returning to normal and passenger traffic picking up, AAI will not have to borrow for working capital needs this year.

Despite the loss, capital expenditure was Rs 2,100 last year. It has borrowed Rs 1,000 crore for the purpose this year.

“Our capital expenditure will continue as planned,” Kumar said. “To meet the capital expenditure requirements for this fiscal, we have borrowed Rs 1,000 crore. Further, based on the future funds requirement, a decision on additional borrowing will be undertaken.”

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