Airport privatisation 3.0 to lift off after polls
NEW DELHI: An increasing number of airports in India will sport private-sector owners, as their state-owned operator prepares to privatise 13 more airports in the coming months. The plan will also include the sale of its residual stake in the bigger airports of Bengaluru and Hyderabad, according to two senior officials aware of the matter.
Airports Authority of India (AAI) plans to kick off the third phase of airport privatisation after the general elections, beginning with sale of its remaining 13% stake in Bangalore International Airport Ltd (BIAL) this year, the officials said on condition of anonymity.
“The plan is to be implemented after the new government takes over in June,” one of the officials said. “Along with Bengaluru, AAI will look to sell its stake in Hyderabad airport as well.”
Currently, financial investor Fairfax (Fairfax India Holdings Corp) owns around 64% of BIAL, which operates the Bengaluru airport.
Siemens Project Ventures GmbH holds 10%, while AAI and Karnataka State Industrial and Infrastructure Development Corp. hold 13% each.
GMR Hyderabad International Airport Ltd, 74% owned by the GMR group, operates the Hyderabad airport. The Telangana government and Airports Authority of India own 13% each.
Queries sent to AAI, Bengaluru airport and Hyderabad airport remained unanswered till press time.
As part of airport privatisation 3.0, AAI plans to invite bids for operation, management and development of 13 other airports in public-private-partnership mode, the officials added.
Among these are six airports—Bhubaneswar, Trichy, Indore, Raipur, Amritsar and Varanasi—that are among the top 20 airports operated by AAI in terms of passenger traffic.
These six will be clubbed with seven loss-making small airports—Kushinagar (in Uttar Pradesh), Gaya (Bihar), Hubballi (Karnataka), Aurangabad (Maharashtra), Jabalpur (Madhya Pradesh), Tirupati (Andhra Pradesh) and Kangra (Himachal Pradesh). The plan is to target infrastructure growth across both major and minor airports, one of the officials said.
“Under the first step, AAI is likely to float a request for proposal and invite bids for leasing 13 airports for a period of 50 years,” the official added. “The plans for divestment of stake and public-private partnerships have been in the pipeline for some time now, but we expect the implementation this year.”
“Given that Indian airports have huge growth potential for non-aero revenues when compared to their global counterparts, and given the high growth in passengers and spend per passenger, we expect the growth to remain strong,” said Vinay Kumar G., vice president & sector head - corporate ratings, Icra Ltd.