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The Airports Authority of India's (AAI) tender to partially privatise the Ahmedabad and Jaipur airports did not find any takers, reports Business Standard.
The deadline to submit bids was October 20 and has now been extended by a month. Despite the government relaxing norms for private firms to play a role in the airport business, private firms apparently do not see many opportunities in the space.
One of the guidelines proposed was of terminal management for 15 years, where the bidder will be required to pay a pre-fixed rent to AAI with the revenue they generate per passenger. The other norm was that the entire capital investment will be made by AAI.
Sources told the paper that private companies were reluctant to take part because the scope to generate revenue from only airport terminals was too low.
“Private players want to play on a large scale, and prospective bidders want to operate an entire airport. Then the prospects of profit become higher just terminal operation doesn’t provide any opportunity,” one of the prospective bidders told the paper.
The option of completely privatising airports seems to be ruled out for now. Civil Aviation Ministry sources told the paper that the Centre is unlikely to go for complete privatisation of airports before the general elections in 2019.
For now, the AAI is likely to relax some more norms in the bidding process. An official told the paper that the adjusted rules are likely to allow private firms have more control over the capital investment and operate airside development as well. The tweaking of these norms will help in making it lucrative for private players.
The United Progressive Alliance (UPA) government vouched for privatisation of airports. However, airlines resisted the move on the grounds that passengers and airlines will have to pay extra to use the airports and its facilities.
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