Centre to Privatise 20-25 More Airports

As the privatisation of public sector undertakings continues under the Modi government 2.0, another proposal to privatise 20-25 airports across the country has been revealed. This decision comes after the privatisation of six major airports was announced in February this year. The government expects that there will be significant participation by foreign airports in this second phase, said Airport Authority of India (AAI) Chairman Guruprasad Mohapatra.

Earlier, the Adani Group had place the highest bids to operate, manage and develop six airports in Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati, which the Airports Authority of India had put up in November 2018.

"We have privatised six airports... We are now planning to privatise 20-25 airports in next phase," said Mohapatra at a press briefing. He said the AAI will decide the names of these airports with annual passenger traffic over 1.5 million soon and recommend them to the Ministry of Civil Aviation. "They will take the final call," he said.

Explaining about the planning related to the second round of privatisation, he said, "What we have done is, we have appointed a consultant to understand relative attractiveness of various airports for private sector investments."

"It is open for everyone to bid. There are tremendous possibilities. With this (success in first round), I am sure that in the next round of privatisation we do, I am hoping to see a lot of foreign airports participating in it," he added.

He said airports such as Dublin and Munich have showed tremendous interest but they "probably required more confidence" and waited to see the success of the first round of privatisation.

"They have seen now that it is successfully happening. So, in the second round, we expect signification participation coming from airports like them," he said.

Read More: How Modi Bypassed Norms to Try and Enable Adani’s Entry into Airport Business

In February, the Adani Group placed the highest bid for six airports. The AAI had chosen the winner on the basis of the "per-passenger fee" offered by the bidders. On July 3, the Union Cabinet had approved the leasing out of Ahmedabad, Lucknow and Mangaluru airports to Adani Group. Though the Adani group had emerged as the highest bidder for the remaining three airports as well, the government is yet to finalise the decision.

Among these, in the case of Thiruvananthapuram airport, the centre has been facing strong resistance from the Left Democratic Front government in Kerala. Soon after the Centre’s in principle approval, the state government had approached the Kerala High court challenging the AAI’s arbitrary and illegal attempt to opt a private entity for the management of the airport. On March 5 this year, in a writ petition, the state government had stated the AAI’s move to hand over the airport to Adani group was violation of provisions of the AAI Act as well as the property rights of the state government in regards to the airport land.

The 258.06 acre of land where the airport was being built up is under the state government. Moreover, the state government which has expertise in airport management, unlike Adani group, had taken part in the auction through Kerala State Industrial Development Corporation (KSIDC). KSIDC’s Trivandrum International Airport Limited (TIAL)- which was set in the Cochin International Airport Limited (CIAL) model- bid was slightly behind Adani’s.

Communist Party of India (Marxist) [CPI(M)] MP from the state, KK Ragesh had raised this issue on June 24 in the Rajya Sabha, saying, “It is regrettable that the state government is being considered on the same footing as the Adani Group.” He asked, "Thiruvananthapuram is a profit-making airport. Why is this airport being given to the Adani Group.” But, the Centre is yet to finalise the decision in the case of Thiruvananthapuram Airport.

Read More: 10,000 AAI Employees to Go on Indefinite Strike Against Privatisation of Airports

Meanwhile opposition parties and trade unions have been opposing the privatisation of airports. Soon after the government’s plans to privatise 20-25 more airports came out, Congress attacked the government saying that the Modi government has ended up benefiting big private players, but goes against the common man.

In February this year, in a letter to Civil Aviation Minister, Centre of Indian Trade Unions (CITU) general secretary Tapan Sen had said, “All these six airports have been modernised through huge investment from public exchequer under the supervision of Airport Authority of India and the quality of modernisation of these six airports are no way inferior, if not superior, to that made in the airports, of Delhi, , Mumbai, Hyderabad and Bangalore under private sector operators, thereby decisively proving competence and capability of the public sector Airports Authority of India.”

Besides, in February, almost 10,000 employees of AAI had observed a strike in protest against the privatisation of six airports, under the banner of Airports Authority Employees Union (AAEU).

Amid all these protests and oppositions, on July 16, the Rajya Sabha passed a Bill allowing the Airports Economic Regulatory Authority of India (AERA) to bid out any new airport at a pre-determined tariff structure. Replying to the discussion on the Bill, Civil Aviation Minister Hardeep Singh Puri said, “As many as 16 airports will be in the purview of AERA. All other airports will continue to be looked after by the Civil Aviation Ministry.”

Currently, major airports with an annual capacity to handle one-and-a-half million passengers come under the purview of Airports Economic Regulatory Authority of India (AERA). If the amendment is passed by Parliament, the definition of major airports would be changed to any aerodrome which has or is designated to have annual passenger capacity of three-and-a-half million.

The Cabinet on June 24 had approved the Airports Economic Regulatory Authority(Amendment), Bill. The AERA is a regulator that has the powers to set the tariffs charged at airports.

The Airports Economic Regulatory Authority of India (AERA) (Amendment) Bill was last approved by the Cabinet during the Modi government’s first tenure in December 2017.

However, it could not be passed in last year’s Monsoon Session. With the election of a new Lok Sabha, the older Bill had lapsed and therefore, the Cabinet approved the Bill again.

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(With inputs from PTI)