The government plans to award 11 airports, including those at Varanasi and Tirupati, to private concessionaires under the public-private-partnership (PPP) model, grouped into five bundles. According to an official document, the civil aviation ministry has proposed engaging private partners for these airports, with each bundle to be awarded to a single concessionaire, combining five major airports with six smaller ones.
The Public Private Partnership Appraisal Committee (PPPAC), at its meeting held on August 4, gave in-principle approval to the civil aviation ministry’s proposal. Under the plan, Amritsar and Kangra-Gaggal airports will form one bundle, while Varanasi, Gaya and Kushinagar will make up another. Bhubaneswar and Hubballi airports will be grouped together, as will Raipur and Aurangabad, while Tiruchirappalli and Tirupati airports will form a separate bundle, according to the minutes of the PPPAC’s August 4 meeting. The PPPAC, chaired by Economic Affairs Secretary Anuradha Thakur, is responsible for appraising public-private partnership projects at the central level.
These airports are set to be leased out under the PPP model for a concession period of 50 years. As per the document, the number of airport bundles that can be awarded to a single bidder will be capped, in order to mitigate risks arising from market concentration and potential over-leveraging, including any cascading impact across projects. The total investment expected from the concessionaires taking over operations at these airports is estimated at INR 8,622 crore.
The ministry has also proposed a one-year joint management period involving existing employees of the Airports Authority of India (AAI) once the airports are handed over to private players. Under the proposal, concessionaires would be required to retain 60% of AAI employees for up to three years. This marks a shift from the previous round of transactions, which included a one-year joint management period followed by a two-year deemed deputation period. The document noted that historical evidence suggests such arrangements have generally been acceptable to AAI employees.
According to the minutes of the meeting, the 11 airports selected for the current round were identified through a phased and data-driven approach undertaken by AAI. Initially, 12 major airports were assessed based on passenger traffic, land availability, commercial potential, financial performance and airport-specific strengths and constraints, of which six were recommended for leasing. Subsequently, 136 smaller airports were evaluated for potential bundling with these major airports, based on parameters including traffic potential, capital expenditure requirements, geographical proximity, city-side development potential and overall financial viability.
Following filtering, scoring and assessment of various major-small airport combinations, the AAI Board approved the final proposal comprising five major airports bundled with six smaller ones during its meeting held on May 23, 2022. This follows an earlier round in 2018-19, when the government awarded six AAI airports under the PPP model.