The government plans to award 11 airports, including Varanasi and Tirupati, to private concessionaires under the public-private partnership model in five bundles, according to a civil aviation ministry proposal. The arrangement envisages that each bundle will be awarded to a single concessionaire after competitive bidding. Five major airports will be paired with six smaller facilities to create balanced portfolios that combine passenger traffic potential with development and commercial opportunities.

The Public Private Partnership Appraisal Committee (PPPAC) gave in-principle approval to the proposal at its meeting on August four, and the minutes set out the proposed groupings. Amritsar will be bundled with Kangra-Gaggal while Varanasi will be grouped with Gaya and Kushinagar. Bhubaneswar is to be paired with Hubballi and Raipur with Aurangabad, and Tiruchirappalli will be bundled with Tirupati. The grouping reflects assessments of geographical proximity and complementary traffic profiles.

The airports are to be leased for a concession period of 50 years and the proposal includes a cap on the number of airport bundles that may be awarded to a single bidder to limit market concentration and potential over-leveraging. The ministry has proposed a one-year joint management period involving existing Airports Authority of India (AAI) employees once assets are bid out and a requirement that concessionaires retain 60 per cent of AAI employees for up to three years to ensure continuity of operations.

The 11 sites were selected following a phased, data-driven assessment by the AAI that initially evaluated 12 major airports and subsequently examined 136 smaller airports on parameters such as passenger traffic, land availability, capital expenditure needs and city-side development potential. The AAI board approved the plan on May 23, 2022. The total investment expected from concessionaires is estimated at Rs 86.22 bn and the previous round in 2018-19 involved six airports under PPP.