PPPAC approves privatisation of 11 Indian airports via bundling model

The Public Private Partnership Appraisal Committee (PPPAC) has granted in-principle approval for the privatisation of 11 airports in India. The Ministry of Civil Aviation proposed these airports be offered to private players in five distinct bundles.

Under the proposed bundling model, each bundle will be awarded to a single concessionaire for a 50-year period. This strategy aims to enhance the financial viability of smaller airports by leveraging operational synergies and revenues from larger facilities.

Private concessionaires will manage the operations, development, and management of passenger terminals and city-side infrastructure. However, the Airports Authority of India (AAI) will retain control over Air Traffic Control and Communication, Navigation and Surveillance (CNS) services. Additionally, AAI's subsidiary, AAICLAS, will continue to manage cargo operations.

Concessionaires will also be responsible for sanctioned capital expenditure within three years of the commercial operations date, as well as capacity augmentation in later phases. The PPPAC noted concerns regarding potential market concentration and the oligopolistic nature of the aviation sector.