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- The Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the proposal for leasing out three airports, Jaipur, Guwahati and Thiruvananthapuram, to Adani Enterprises.
- The three airports will be leased for operation, management, and development in public-private partnership (PPP) model to Adani Enterprises
- The company has the right to operate these airports for 50 years.
Why Adani?
- Airports Authority of India has released request for proposal in December 2018 through global competitive bidding wherein per passenger fee was the bidding parameter.
- The technical bids were opened on February 16, 2019 and the financial bids of the qualified bidders were opened on February 25, 2019.
- Adani Enterprises has won all the bids by quoting highest per passenger fee for all the 6 airports.
- Reports suggest Adani quoted a fee of Rs 177 per passenger for Ahmedabad.
- Chaudhary Charan Singh International Airport in Lucknow,
- Sardar Vallabhbhai Patel International Airport in Ahmedabad,
- Jaipur International Airport,
- Mangalore International Airport,
- Trivandrum International Airport in Thiruvananthapuram,
- Lokpriya Gopinath Bordoloi International Airport in Guwahati
- Contracts for the Ahmedabad, Lucknow and Mangalore airports were signed earlier this year.
- But Adani is yet to take over their operations because of the disruptions from the coronavirus pandemic.
Benefits to the government
- The Airports Authority of India (AAI) will get ₹1,070 crore upfront from handing over the airports for redevelopment.
- The upfront ₹1,070 crore that will come to AAI will be used for developing airports in smaller towns.
How Adani will earn?
- Airports are leased out to private players for redevelopment on the basis of revenue sharing arrangement with the AAI.
- In addition to imposing a user fee on passengers, the private developer also has the right to establish new revenue streams through measures such as real estate developmentaround the airport.
- In 2017-18, around 30 million domestic and international passengers flew through the 6 airports won by Adani Enterprises.
- Passenger traffic has grown 78% at these airports since 2014-15.
Benefits of leasing out airports through PPP model
- There would be efficiency, expertise, and professionalism..
- Apart from this, the public sector needed investments.
- PPP in airport infrastructure projects has so far ensured world-class infrastructure at airports.
- The quality of services to airport passengers has also improved like- Mumbai, Delhi, Bengaluru, Hyderabad.
- Airports Council International (ACI) has been recognizing PPP airports in India as top-ranked airports in Asia and the world in terms of Airport Service Quality.
- The PPP model has helped AAI enhance revenues and utilize funds for developing and upgrading other airports across India.
- “In view of the unilateral decision taken by the Government of India without giving credence to the cogent arguments put forward by the State government,
- It will be difficult for us to offer co-operation to the implementation of the decision, which is against the wishes of the people of the State,“ Vijayan said in a letter to Modi.
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