The civil aviation ministry has proposed leasing 11 Airports Authority of India airports to private concessionaires under a public-private partnership model. The airports, including Varanasi and Tirupati, would be grouped into five bundles and offered for 50-year concession periods.
The proposal has received in-principle approval from the Public Private Partnership Appraisal Committee. The estimated investment by selected concessionaires is pegged at Rs 8,622 crore.
India Airport PPP Leasing Plan Moves Forward
The government is preparing a new round of airport privatisation through the public-private partnership model. Under the proposal, 11 Airports Authority of India airports would be offered to private operators in five bundles rather than as individual assets.
The plan is still at the proposal stage. The Public Private Partnership Appraisal Committee, or PPPAC, gave in-principle approval to the civil aviation ministry’s proposal at its August 4 meeting, according to the minutes cited in the report.
Each airport bundle would be awarded to one concessionaire for a 50-year operating period. The grouping model combines five larger airports with six smaller ones, an approach aimed at balancing passenger traffic, commercial opportunity, development potential and financial viability.
The ministry has also proposed a limit on the number of bundles that can be awarded to a single bidder. The measure is intended to reduce concerns over market concentration, excessive borrowing and possible financial risks across projects.
11 Airports Private Concessionaires Would Operate In Five Bundles
The proposed bundles bring together airports from different regions. Amritsar and Kangra-Gaggal would form one bundle, while Varanasi, Gaya and Kushinagar would be grouped together.
Bhubaneswar and Hubballi are proposed as another bundle. Raipur and Aurangabad would form a separate group, while Tiruchirappalli and Tirupati airports would be offered as the fifth bundle.
The plan places Tirupati airport, one of Andhra Pradesh’s key religious and tourism gateways, in a joint package with Tiruchirappalli. Varanasi, another major pilgrimage and tourism destination, would be part of the bundle with Gaya and Kushinagar.
The selection of airports was based on a phased assessment by the Airports Authority of India, according to the PPPAC meeting minutes. The process considered passenger traffic, land availability, commercial potential, capital-expenditure needs, geographical proximity and city-side development opportunities.
India Airport PPP Investment Rs 8622 Crore Proposed
The selected private concessionaires are expected to invest an estimated Rs 8,622 crore in the 11 airports. The investment would support airport operations, capacity expansion and broader infrastructure development under the proposed PPP framework.
Public-private partnerships have become a key route for the government to bring private capital and operational expertise into airport infrastructure. The model allows private players to operate and develop airports under a concession agreement while the assets remain within the wider public infrastructure framework.
The ministry’s proposal also includes a transition plan for existing Airports Authority of India employees. It suggests a one-year joint management period after an airport is handed over to a successful bidder.
In addition, the concessionaire would be required to retain 60 per cent of AAI employees for up to three years. The proposed arrangement is designed to provide continuity during the transition and address employee concerns as operations move to private management.
Tirupati Airport PPP Proposal Highlights New Privatisation Round
The proposed transaction marks another major phase in India’s airport PPP programme. In 2018-19, the government awarded six AAI airports under the PPP model, setting a precedent for private operation of state-owned airport assets.
For the current round, AAI initially assessed 12 major airports and later examined 136 smaller airports for potential bundling. After further screening, scoring and evaluation of alternative combinations, the proposal was narrowed to five major airports and six smaller airports.
The AAI Board approved the bundle proposal in May 2022, according to the meeting minutes. The PPPAC’s in-principle nod now moves the plan forward, though the process will require further government action and bidding before private concessionaires are selected.
The proposed leases will be closely watched by airlines, airport employees, investors and passengers. The final outcome will depend on tender terms, bidder interest, investment commitments and the government’s next steps in taking the airport bundles to market.
