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Bids For Privatisation Of 11 Airports By April
AVIATION & AIRPORTS

Bids For Privatisation Of 11 Airports By April

The Airports Authority of India will begin the third round of airport monetisation, seeking bids for 11 airports by April. The programme has been organised into five bundles combining metro and non metro airports: Amritsar and Kangra; Varanasi, Kushinagar and Gaya; Raipur and Aurangabad; Bhubaneswar and Hubli; and Trichy and Tirupati. The assets are to be leased on long term concession through a public private partnership model for operation, management and development. The move follows a gap of nearly five years since the previous round.

Officials at the ministry indicated that both domestic and international airport operators have expressed preliminary interest in taking part in the bidding. Interested parties cited by officials include the Adani Group, GMR Airports, Vinci Airports and the National Investment and Infrastructure Fund, along with several global private equity funds and airport developers. The proceeds from the leases are expected to be used by the authority to expand and create new airport assets. Authorities aim to raise around Rs 60,000 million (mn) from the programme in the year.

The third round marks the first time that a bundling approach will be applied to pair high traffic, profitable airports with smaller, loss making ones to enable cross subsidisation. The public private partnership appraisal committee will examine structural questions including the choice between a revenue sharing model and a per passenger fee, the framework for user development fees and whether caps should be set on the number of airports a single entity may operate. These choices will influence passenger tariffs at smaller airports.

Separately, the government has announced an offer for sale of a five per cent stake in Bharat Heavy Electricals to raise about Rs 44,220 million (mn), with the sale floor price set at a discount to the recent market close. The offer is structured as a three per cent sale with an additional two per cent as a greenshoe option, and retail investors will be able to participate on the second day. Disinvestment receipts for the year have already reached significant levels.

The Airports Authority of India will begin the third round of airport monetisation, seeking bids for 11 airports by April. The programme has been organised into five bundles combining metro and non metro airports: Amritsar and Kangra; Varanasi, Kushinagar and Gaya; Raipur and Aurangabad; Bhubaneswar and Hubli; and Trichy and Tirupati. The assets are to be leased on long term concession through a public private partnership model for operation, management and development. The move follows a gap of nearly five years since the previous round. Officials at the ministry indicated that both domestic and international airport operators have expressed preliminary interest in taking part in the bidding. Interested parties cited by officials include the Adani Group, GMR Airports, Vinci Airports and the National Investment and Infrastructure Fund, along with several global private equity funds and airport developers. The proceeds from the leases are expected to be used by the authority to expand and create new airport assets. Authorities aim to raise around Rs 60,000 million (mn) from the programme in the year. The third round marks the first time that a bundling approach will be applied to pair high traffic, profitable airports with smaller, loss making ones to enable cross subsidisation. The public private partnership appraisal committee will examine structural questions including the choice between a revenue sharing model and a per passenger fee, the framework for user development fees and whether caps should be set on the number of airports a single entity may operate. These choices will influence passenger tariffs at smaller airports. Separately, the government has announced an offer for sale of a five per cent stake in Bharat Heavy Electricals to raise about Rs 44,220 million (mn), with the sale floor price set at a discount to the recent market close. The offer is structured as a three per cent sale with an additional two per cent as a greenshoe option, and retail investors will be able to participate on the second day. Disinvestment receipts for the year have already reached significant levels.

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