Chennai: The Adani group, that is reeling under a debt of Rs 82,810 crore on its book, bid aggressively for privatisation of five airports, winning all of them. The bids were put out by the Airports Authority of India (AAI), which at present manages the airports concerned.
Adani Enterprises, the flagship entity of the group, on Monday bagged the rights to operate, manage and develop airports at Ahmedabad, Jaipur, Lucknow, Thiruvananthapuram and Mangalore by offering the highest per-passenger fee (PPF). PPF is paid by the developer to State-owned AAI for every domestic and international passenger handled at the airport.
According to the concession agreement for privatisation of five airports, the facilities will be handed out to Adani Enterprises for a period of 50 years under the public- private partnership model, once all the formalities get over.
Adani Enterprises outbid National Infrastructure and Investment Fund (NIIF) for the Ahmedabad airport by quoting Rs 177 PPF as against Rs 146 by NIIF. GMR’s bid was at Rs 85.
Similarly, for Lucknow, Adani offered PPF of Rs 171 as compared to AMP Capital’s Rs 139, while GMR was a distant third at Rs 63. In the case of Mangalore airport, Adani’s bid of Rs 115 was 2.5 times the second-highest bid by Cochin International Airport (CIAL) of Rs 45. GMR offered Rs 18 as PPF to the AAI for this airport.
The PPF mode of privatisation is different from the way the Delhi and Mumbai airports were privatised in 2006. Here the GMR and the GVK group, who handle the two airports respectively, have entered into a 74:26 JV with AAI and share a percentage of their gross revenue with the latter. For instance, GMR shares 45.9 per cent and GVK 38.7 per cent of its revenue with AAI.
The method is considered more sustainable and predictable for developers as it is based on transparent criteria of passenger traffic. It also give more freedom to a developer to maximise non-aeronautical revenue sources like retail, food and beverage and car parking as the income would not be shared.
It must be noted that the group was recently vying for a stake in the Mumbai airport. GVK did not participate in this round of airports privatisation.