Government clears leasing out Ahmedabad, Lucknow & Mangaluru airports to Adani Group

NEW DELHI: The airports in Ahmedabad, Lucknow and Mangaluru will now be run by the Adani group in public-private partnership like the metro ones in Mumbai and Delhi, for the next 50 years. The Union Cabinet on Wednesday “approved the leasing of (these) three airports of Airports Authority of India (AAI) through PPP to the highest bidder, Adani Enterprises, for operation, management and development for a lease period of 50 years,” a government statement said.The Modi-I government had decided to lease out six airports — Ahmedabad, Jaipur, Mangalore, Trivandrum, Lucknow and Guwahati — for 50 years to run them in PP mode. AAI had invited bids for them in December 2018 and Gautam Adani’s infra major Adani Group had emerged as the highest bidder in all these six airports.Asked why only a decision on three airports was taken when the bidding had been completed for six airport, Union minister Prakash Javadekar briefing the media after the Cabinet meeting said: “Process is complete (for these three places). Wait for next (meaning the Cabinet will consider them when their process is complete too.”Speaking about approval of leasing out of three airports, the government statement issued on Wednesday says “these projects will bring efficiency in delivery, expertise, enterprise and professionalism apart from harnessing needed investments in public sector. This will also result in enhanced revenues to the AAI, which may lead to further investment by AAI at Tier II and Tier III cities and economic development in these areas in terms of job creation and related infrastructure.”The move for the six airport was the second big round of privatising airports after Delhi and Mumbai were handed out to private players, GMR and GVK, over a decade back. After emerging as the highest bidder for all the six airports, the Adani Group had said in a statement on February 26, 2019, that it “would be aiming to scale up the infrastructure to bring these facilities on par with global standards.”The Adani Group will be “responsible for operations and management of the existing airport assets as well as for designing, engineering, financing, construction and development of the additional air-side, terminal, city-side and land-side infrastructure for the airport and the operation and management thereof in accordance with the concession agreement and applicable laws,” under the PPP lease terms.Improving over the Delhi and Mumbai model, AAI has now opted for a new model of revenue generation from these six airports’ prospective bidders. “The concessionaire shall pay to the Authority, on a monthly-basis, a fee (the ‘per-passenger fee’ or PPF) in respect of each passenger (both domestic and international) handled at the airport,” the request for proposal document for these six airports says.Adani’s PPF was the highest for all the six airports at Rs 177 for Ahmedabad; Rs 171 for Lucknow and Rs 115 for Mangalore. For the remaining three airports whose proposal for leasing out will be next considered by the Cabinet, Adani’s PPF was similarly highest at Rs 174 for Jaipur; Rs 168 for Trivandrum Rs 168 and Rs 160 for Guwahati.Jaipur and Ahmedabad airports had got seven bids each; Lucknow and Guwahati six each and Mangalore and Thiruvananthapuram three each. In all, AAI had got 32 bids for the six airports from 10 bidders, with Adanbi and GMR bidding for all the six airports.The PPF bid amounts shows how aggressively the Adani Group bid for the airports. Adani’s foray into airport will now mean India has more private sector biggies in the field which so far was dominated by the GMR (Delhi and Hyderabad) and GVK (Mumbai and till some years back Bangalore).