13 airports set for divestment packaged into six bundles

Forum Gandhi Mumbai | Updated on March 16, 2021

The Ministry of Civil Aviation has decided to privatise 13 airports, currently under the Airports Authority of India, packaged in six buckets with a mix of a profitable and an under-performing airport to be monetised through the Operation, Management and Development Agreement (OMDA) model.

According to sources, the first bundle includes a combination of Tiruchi and Salem airports. By the end of FY20, the AAI had earned a profit of ₹22.85 crore at Tiruchi whereas Salem airport had incurred a loss of close to ₹8.76 crore.

The second basket includes Bhubaneswar and Jharsguda airports that have made, respectively, a profit of ₹34.22 crore and a loss of ₹16.29 crore.

The third bucket is of two airports in Madhya Pradesh — Indore and Jabalpur. Indore’s airport made a profit of ₹4 crore in 2019-20 whereas Jabalpur incurred a loss of ₹19.24 crore the same fiscal year.

The Ministry has clubbed Raipur and Jalgaon airports for the OMDA-based monetisation. Interestingly, both these airports incurred losses in FY20 — the Chhattisgarh capital of ₹26.75 crore and the latter of ₹3.72 crore.

Another pairing is of the Amritsar and Kangra airports. Amritsar’s airport posted a profit of close to ₹92 lakh whereas Kangra, also known as Gaggal airport, posted a net loss of ₹9 crore.

The last bucket has three airports. It includes Varanasi, which posted a net loss of ₹ 1.6 crore; Gaya, which posted a net loss of ₹26 crore, and Kushinagar (no data available.)

According to DSK Legal’s projects partner, Anjan Dasgupta, who specialises in asset monetisation via the PPP model, clubbing of airports can prove lucrative for the government.

“The buckets are a good way for tier-2 airports. These are all brownfield airports, and some capex will be required for the investors to modernise them, and, in return, the investor gets a good concession and RoI. This will also be good for passengers as they will get a good quality airport.”

The Ministry did not respond to a BusinessLine query.

Published on March 16, 2021

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