Tangible economic gain to AAI on leasing out six airports under PPP, says government

NEW DELHI: Amid persisting concerns in certain quarters about leasing out of six airports, the government on Wednesday told the Rajya Sabha that Per Passenger Fee (PPF) was the bidding parameter and based on the PPF offered by the winning bidder for these aerodromes, AAI will earn Rs 904 crore profit in 2020-21.

Recently, the Airports Authority of India (AAI) awarded six airports -- Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru -- for operations, management and development under Public Private Partnership (PPP) for 50 years.

Adani Group has won the bids for the six airports. "The per passenger fee was the bidding parameter. It was estimated that on the basis of the PPF offered by the winning bidder for six airports, AAI will earn a profit of Rs 904 crore for the year 2020-21 as against estimated profit of Rs 530 crore had it been operated by AAI itself," Minister of State for Civil Aviation Hardeep Singh Puri said in a written reply.

While noting that AAI's profitability will continue to increase year after year as PPF is indexed to the Consumer Price Index (CPI), he said that AAI will get back their investment in these six airports to the tune of Rs 2,299.26 crore as upfront payment, which can be used for development of airport infrastructure. "Hence, there is a tangible economic gain to AAI by leasing these airports under PPP," the minister noted.

He also pointed out that to promote competition, prior operation and management experience in airport sector was made neither a prerequisite nor a post bid requirement for participating in the bid process for six airports.

In another written reply related to leasing out of Thiruvananthapuram airport, the minister said that on the basis of the PPF offered by the winning bidder, AAI will earn a profit of Rs 179 crore for 2020-21 as against estimated profit of Rs 153 crore had it been operated by AAI itself.

In addition, AAI will get back their investment in Thiruvananthapuram airport to the tune of Rs 476 crore as upfront payment, as per the reply. The responses came to queries by Rajya Sabha member from Kerala Elamaram Kareem.

Concession agreements for Ahmedabad, Lucknow and Mangaluru airports were signed on February 14, 2020, and for Jaipur, Guwahati and Thiruvananthapuram on January 19, 2021. Ahmedabad airport was handed over on November 7, 2020, Lucknow on Novembr 2, 2020 and Mangaluru on October 31, 2020.