There has been a concerted effort in the past couple of years to privatise the airports in the country.

Government may restrict bidding for airport contracts to two per firm
Money Airport Privatisation Monday, January 20, 2020 - 18:31

The government is planning to restrict the number of airports that any single bidder will be allowed to manage when future biddings take place at two per firm. There has been a concerted effort in the past couple of years to privatise the airports in the country. The private entity has to participate in the bidding process and if their bidding is found successful, they will be given the contract to operate and maintain the airports and pay a fee to the government.

This brings double benefits to the government. One is it doesn’t have to make any fresh investments in improving the infrastructure in these airports and they earn revenue in return.

In the last round of privatisation, the Adani group bagged the contract to operate six airports viz. Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram. While the first three have been handed over to the private operator, the process for transferring the remaining three is underway.

However, the government has been facing criticism that it has favoured one single entity and does not want this to sully the process in future. Politically, the opposition has been constantly levelling charges that the government favours a few business houses in the country. The added criticism in the case of Adani getting the six airports has been that they have no previous experience in handling airports.

The government has set itself a target of privatising 30-35 airports in the country in the coming few years and this will be done in stages picking up a few at a time. The draft policy and methodology for the bidding and auction is currently being prepared. This condition of permitting only two airports to a single bidder may figure in that draft. 

The government is looking at large scale investments flowing into the country with the privatisation effort in the airport management space. The expectation is there could be inflow of up to â‚ą1.4 trillion. The operation and management of these airports are offered on long term (50 years) basis and gives a lot of scope to the private operators to go ahead and make the investments required to make the infrastructure appealing to both the passengers as well as for commercial exploitation of the premises under their control.

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