The Indian government is moving forward with the privatization of 11 airports, opening the bidding process to a wider array of infrastructure players beyond just the aviation sector. This strategic shift, spearheaded by the Ministry of Civil Aviation, seeks to attract significant investment and diverse operational expertise.
Broadened Eligibility for Bidders
Traditionally, airport privatization bids were restricted to companies with prior aviation sector experience. However, the Ministry of Civil Aviation has clarified that eligible technical experience will no longer be exclusively tied to aviation. Instead, it will be assessed against the broader "Harmonised Master List of Infrastructure" sub-sectors. This crucial change allows rail, logistics, road, and shipping companies, among others, to participate in the upcoming bids.
The ministry's rationale, outlined in its response to the Public Private Partnership Appraisal Committee (PPPAC), acknowledges the comprehensive nature of a concessionaire's obligations. These responsibilities extend beyond flight operations to include extensive infrastructure development, such as passenger terminals, city-side infrastructure (buildings, boundary walls), plant and equipment, and administrative assets.
Investment and Bundling Strategy
An estimated Rs 8600 crore is planned for investment across these projects. A key component of the current proposal is the novel strategy of "bundling" airports – combining a mix of larger and smaller airports into single bid packages. This approach, being introduced for the first time, aims to enhance the financial viability of individual bundles and attract robust market interest.
The ministry plans to conduct a thorough market sounding exercise to gauge private players' reactions to this bundling proposal. Feedback from this exercise will inform any necessary modifications before the final recommendation is submitted to the PPPAC. This iterative process underscores the government's commitment to a successful and well-received privatization drive, leveraging learnings from previous public-private partnership transactions while adapting to current market dynamics. The inclusion of city-side development, with land made available to concessionaires, further sweetens the deal, offering additional revenue streams and development opportunities.