Logistics

New govt to award lease rights for 6 non-metro airports to Adani

P. Manoj Mumbai | Updated on May 23, 2019 Published on May 23, 2019

Adani group   -  Photo via Twitter

Will be one of the first big-ticket deals to be cleared by NDA

The award of lease rights for six non-metro airports to the successful bidder Adani Enterprises Ltd will be one of the first big-ticket deals to be signed by the National Democratic Alliance (NDA) government when it begins a new five-year term in office.

Adani Enterprises had emerged the highest bidder when the Airports Authority of India (AAI) — which currently runs these six airports — sought bids for the operation and management of the existing airport assets as well as the upgradation and development of additional air-side terminals, city-side and land-side infrastructure on 50 years lease for Ahmedabad, Guwahati, Jaipur, Lucknow, Mangaluru and Thiruvananthapuram airports. The winning bid is decided on the basis of the highest per-passenger fee that the concessionaire will pay to the AAI monthly for 50 years. Adani Enterprises bid aggressively to claim the top slot for all the six airports, quoting a per passenger (domestic) fee of ₹177 for the Ahmedabad airport, where the Group is based, ₹174 for Jaipur, ₹171 for Lucknow, ₹168 for Thiruvananthapuram, ₹115 for Mangaluru and ₹160 for Guwahati, when the price bids were opened on February 25.

The award of the lease deal was put on hold as the Cabinet could not ratify the bid in view of the polls. The AAI will earn ₹525-575 crore per year based on the rate quoted by Adani Enterprises, which will escalate based on the traffic growth. Besides, the rate for international passengers will be twice that of domestic passengers. Adani’s entry will increase the number of players in India’s airports business which is currently dominated by GMR, GVK and the state-run AAI. The Adani Group has hired Sidharath Kapur as the CEO to run its airports business. Kapur was till recently the executive director heading the airports business at GMR Group.

Published on May 23, 2019
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