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AAI to privatize 6 state run Airports

The state run Airport Authority of India, is planning to privatize 6 state run Airports, Viz. Ahmedabad, Jaipur, Guahati, Lucknow, Mangalore and Thiruvananthapuram airports in the PPP mode to create world class standards at these 6 airports.In a Pre-development proposal sent to the union ministry of civil aviation, AAI, the largest airport operator in the country intends to retain minority stake, to evince interest among the global airport developers and operators. it is reliably learnt that AAI may even handover 100% stake to the developer for the creation of world class infrastructure at Non- Air side area of these airports.

This move is significant concession given by the AAI, as its previous bid to privatize Kolkatta & Chennai airports hit a roadblock due to the stake dilution issues. New airport developers around the world wants complete control over the development and operation of airports , as the capital outgo is huge and warrants quick decision making that will not happen under dual management boards. The successful running of new PPP airports in india, Viz.. Hydereabad, Mumbai, New Delhi and Bangalore, had emboldened the AAI to tread this path of PPP mode cede the management control and settle for royalty from the proposed developers.

Singapore’s Changi airport group had evinced interest in participating in the airport development in the country and had even evaluated the Chennai and Kolkatta airports bidding process. CAG- The parent company that Runs Singapore’s Changi airport is beleived to be in negotiations to pick up significant stake in Mumbai International Airport from GVK group. CAG along with other global airport operators have been negotiating with GVK group to pick up stake in Mumbai airport.

With AAI’s move, that still needs to be ratified and approved by Modi led BJP government, aviation industry may see another fresh round of buzz after a decade of privatization of Mumbai and New Delhi airports in 2008.

 

Rambabu Vankayalapati

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