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AAI-managed 15 profit-making airports likely to be privatised.

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New Delhi :About 15 profitable airports, including the facilities at Chennai and Ahmedabad, could be put under private management in the first such privatisation initiative by the National Democratic Alliance (NDA) as part of the broader government move to enhance India’s aviation infrastructure.

The Airports Authority of India (AAI) has, by the end of last fiscal, about 15 profit-making airports and these would be the first to be put on the block,” a senior government official, who did not want to be named, told. Earlier, the United Progressive Alliance (UPA) had privatised facilities at the nation’s two biggest aviation hubs — Mumbai and New Delhi — besides the two southern airports in Bangalore and Hyderabad.

Among the profitable airports still under the management of the AAI, New Delhi’s landlord for aviation facilities, are Ahmedabad, Chennai, Jaipur, Kolkata, and Lucknow. The government had earlier decided to award only management contracts at AAI-owned airports to private parties. However, attempts to award contracts for Jaipur and Ahmedabad airports did not receive encouraging bidding interest.

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In what would virtually be the second wave of airports privatisation in India, one of the world’s fastest-expanding aviation markets, think-tanks are working toward building a model mechanism that would shift management and operating ownership of the auctioned facilities away from the AAI.

“The Prime Minister’s Office has directed the Department of Economic Affairs and Niti Aayog to prepare a model mechanism for taking certain airports out of AAI control and handing them over to private players,” said another government official, who did not want to be named.

To implement the plan, South Block has also asked the aviation ministry, with assistance from DEA and NITI Aayog, to prepare a model concession agreement for greenfield airports and for the redevelopment of brownfield facilities.

“The new model concession agreement would take into account all eventualities, including real-estate development on airport land,” said the official cited above.

Analysts welcomed the move, saying that the latest wave of privatisation would drastically improve airport infrastructure in the country

“This, by far, is the best solution to improve . If the government does come out with a proper model agreement, I am sure it will receive immense response from many Indian players that have a lot of appetite left,” said Sanjay Sethi, managing director and chief executive at infrastructure advisory firm Nestor Consulting.

Sethi, however, added that global players may not be too keen on some of the properties since the airports on offer would include those in relatively smaller cities.

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