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Ministry expects cabinet to approve Adani for handing over 6 airports by July
Date: June 10,2019
Time: 3
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Ministry expects cabinet to approve Adani for handing over 6 airports by July


Ministry expects cabinet to approve Adani for handing over 6 airports by July


As per Economic Times(ET), Adani Enterprises is likely to be formally awarded the contracts for doing so following the re-election of the Modi government. Cabinet approval for the move is likely next month, said aviation ministry officials. “The award of projects happened during the end of the first term of the government,” said one of the persons cited above. “The Cabinet did not take up the matter for approval as the government had completed its tenure then and the ministry’s note was not accepted by the cabinet secretariat. We will again be sending the note and expect it to be cleared by July end.” Transfer of all six assets to Adani Enterprises will start after this, he said.

Employees at the airports, currently being run by Airports Authority of India (AAI), will have the option of joining Adani Enterprises or staying with the state-owned organisation. Adani won the right to upgrade and operate airports in Ahmedabad, Lucknow, Jaipur, Guwahati, Thiruvananthapuram and Mangalore for 50 years in auctions held late last year. AAI will earn about INR 1,300 crore annually from the privatisation of the six airports, according to an internal estimate by the organisation that ET has seen. Earnings to be used to develop interior airports. Adani Enterprises had bid aggressively for the airports, exceeding offers by GMR Group, the country’s biggest airport manager, according to people with knowledge of the matter.

GP Mohapatra, Chairman, AAI did not comment on the number cited above but said that earnings will be used to develop airports in the country’s interior.

“The privatisation of these six airports, while freeing us from managing these, will give us considerable revenues, which we can put into the development of smaller airports in the country, which would not get any interest from private parties,” Mohapatra told ET. “The development of these smaller airports will be instrumental in giving a push to India’s aviation growth.” In November last year, the government cleared a proposal for managing six AAI run airports on a public-private partnership (PPP) basis and received 32 technical bids from 10 companies. This was the government’s first airport privatisation attempt in 13 years after the GMR and GVK groups won the right to manage Delhi and Mumbai airports in 2006. Greenfield airports like those in Hyderabad and Bengaluru were also awarded at the same time. The government has adopted the revenue-per-passenger model, which differs from the revenue-share model that had led to a spike in airport charges at Delhi and Mumbai. The government expects this will keep airport charges under control.

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