AAI saving nearly Rs 515 crore annually from leasing out of six airports under PPP

Airports Authority of India (AAI) is saving around Rs 515 crore annually in terms of running costs of six airports that have been on lease under the public-private partnership since 2018, according to the civil aviation ministry. Six airports — Mangaluru, Lucknow, Ahmedabad, Thiruvananthapuram, Jaipur and Guwahati — were leased out under the Public Private Partnership (PPP) in 2018.

At the present valuation, AAI has incurred an expenditure of around Rs 2,767 crore at these six airports before handing over them to the PPP concessionaire. The cost included capital work in progress and a Regulated Asset Base (RAB) in aeronautical and non-aeronautical assets. "As per the concession agreement of 6 PPP airports, the concessionaire has paid this amount in the form of an upfront fee. This amount is subject to the requisite reconciliation, true-up and final determination by Airports Economic Regulatory Authority of India (AERA) of the quantum of such investment," Minister of State for Civil Aviation V K Singh said in a written reply to Rajya Sabha on Monday.

In the reply, the minister also gave the break-up of airport-wise "running costs saved by AAI per annum". For Ahmedabad, the amount is Rs 137.41 crore, Jaipur (Rs 50.96 crore), Lucknow (Rs 62.96 crore), Mangaluru (Rs 53.29 crore), Thiruvananthapuram (Rs 142.09 crore) and Guwahati (Rs 67.88 crore). Besides, the minister provided details about the revenues earned by the six concessionaires since taking over these airports. For Ahmedabad, the revenue is Rs 506 crore, Jaipur (Rs 251 crore), Lucknow (Rs 365 crore), Mangaluru (Rs 118 crore), Thiruvananthapuram (Rs 350 crore) and Guwahati (Rs 248 crore).

Currently, 14 airports are operated by private operators under PPP. Out of them, only three airports — Cochin, Bangalore and Hyderabad — were profitable in FY 2022-23, as per data shared by the minister in a separate written reply. Meanwhile, 25 airports are proposed to be leased out during the period from 2022 to 2025 under the National Monetisation Pipeline (NMP). In another written reply, Singh said these airports are being leased for their better management, utilising private sector efficiency and investment.