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The Public Private Partnership Appraisal Committee has given in-principle approval to leasing 11 Airports Authority of India airports to private players for a 50-year concession period.
The 11 airports have been grouped into five bundles, with estimated private investment of Rs 8,622 crore.
The bidding parameter will be a per-passenger fee for domestic travellers; the international passenger fee is fixed at twice the domestic rate.
AAI will retain air traffic control and communication, navigation and surveillance services; concessionaires must retain at least 60% of existing AAI staff.
The Ministry of Civil Aviation has proposed a one-year joint management period after handover.
A public-private partnership is a contract in which a public authority and a private entity share responsibility for building and running infrastructure; in airport concessions the private party typically handles operations, maintenance and development while the public authority keeps ownership and regulatory functions. On their own, small airports such as Kangra, Kushinagar or Hubballi attract little private interest because their passenger volumes cannot support the required investment. Pairing each with a larger, commercially stronger airport in the same package lets the revenues of the strong one carry the weak one — cross-subsidisation — so that the bundle as a whole is viable and the small airport still gets upgraded. The trade-off is a smaller field of bidders, since only players able to fund a whole bundle can compete.
Simple Analogy: It is the logic of a combined ticket: nobody buys the empty museum on its own, so it is sold together with the popular one.
Owns and operates airports and provides air navigation services; retains ATC and CNS functions under the proposed concessions
Appraises central sector PPP projects and grants in-principle and final approvals
GS Paper III > Infrastructure: Airports; Investment models including PPP
General Awareness > Current Affairs > Economy and Infrastructure
General Awareness > Infrastructure financing and PPP
General Awareness > Current Affairs
A contractual arrangement in which a public authority and a private entity share responsibilities for infrastructure development and service delivery.
The fixed term for which a private party is granted the right to operate and earn from a public asset — here 50 years.
Combining commercially strong and weak assets in one package so that cross-subsidisation makes the whole viable.
Public Private Partnership Appraisal Committee, chaired by the Secretary, Department of Economic Affairs, which appraises central PPP proposals.
Communication, navigation and surveillance services supporting air traffic management, retained by AAI as a sovereign function.