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Adani wins bids to operate 5 AAI airports including Mangaluru Airport

New Delhi: The ports-to-edible oil Adani Group has emerged the winner in the privatisation of five out of six airports put up by the government, outbidding a slew of national and international competitors including GMR, AMP Capital and the National Investment and Infrastructure Fund (NIIF).

The Ahmedabad-based group won the right to upgrade and operate the airports of Lucknow, Jaipur, Thiruvananthapuram, Mangaluru and Ahmedabad by mounting aggressive bids which offered a higher payment for passenger fee to the Airports Authorityof India (AAI). The Adani Group will get to manage these airports for 50 years if its offers are approved by the government.

The bids for the Guwahati airport will be opened on Tuesday. Adani Enterprises emerged the highest bidder on the basis of share of revenue offered per passenger. Bids were also received from established players such as GMR Airports, Autostrade Indian Infrastructure Development Pvt Ltd, PNC Infratech Ltd, NIIF & Zurich Airport International AG, AMP Capital, I-Investment Ltd, KSIDC and Cochin InternationalAirport.

Keeping Airport Charges Low:

The revenue per passenger model is different from the revenue share model, which had led to spike in airport charges at airports like Delhi and Mumbai. The government expects this model to keep airport charges under control.

This is the central government’s first airport privatisation attempt in 13 years after the GMR and GVK groups won the rights to manage Delhi and Mumbai airports under the UPA government in 2006. Greenfield airports like those in Hyderabad and Bengaluru were also awarded during the same time.

India’s airport privatisation progressed in fits and starts with the first attempt of the Modi government to award management contracts of Jaipur and Ahmedabad airports coming a cropper. In November last year, the government had cleared a proposal for managing six AAI-run airports on public-private partnership (PPP) basis and received 32 technical bids from 10 companies for these airports. While Ahmedabad and Jaipur airports received seven bids each, Lucknow and Guwahati received six bids each. Mangaluru and Thiruvananthapuram received three bids each.

While Adani Enterprises was named the highest bidder for these airports in an official statement, the government sources said that the final announcement on the winners will be made after clearance from the union cabinet. “The aviation ministry will prepare a cabinet note listing the bids received for these airports. Formal announcement will be made once the cabinet clears it, which should happen soon,” said a government official, who did not want to be identified.

Adani Group said in a statement that it would improve infrastructure at these airports. “The Indian aviation industry is a growing sector with the government’s continuing focus on creating world-class airports. The airports at Ahmedabad, Jaipur, Lucknow, Trivandrum and Mangalore remain lifelines to their respective states that will enable us to infuse enhanced growth and give wings to the aspirations of the Indian people. We would be aiming to scale up the infrastructure to bring these facilities on par with global standards,” it said.

Analysts said that the entry of Adani Group is a big plus for the aviation sector. 

“With the Adanis emerging the highest bidder for these five airports, the field has opened up further and we should see widerparticipation in the coming days. At a time when the government is looking at asset monetisation as an avenue for revenue generation and capital deployment of private sector, the success of the process augurs well for the sector,” said Jagannarayan Padmanabhan, Director and Practice lead- Transport and Logistics at CRISIL Infrastructure Advisory.