Airports privatisation: Aggressive bidding landed five airports in Adani kitty

Strong passenger growth over the past year has been the apparent stimulus for the Adani Group's aggressive bid for five of the six airports that Prime Minister Narendra Modi's government offered for privatisation.

The Gautam Adani-led group outbid its competitors to win the licence to run Lucknow, Ahmedabad, Trivandrum, Mangalore and Jaipur airports for 50 years after the Airports Authority of India (AAI) opened the bids on Monday, sources say. The authorities are yet to open the bids for choosing an operator for the Guwahati airport because of legal reasons.

Media reports say the AAI will be signing a revenue-sharing agreement for these six airports that are different from those for its other joint ventures at Delhi, Mumbai, Bengaluru, and Hyderabad.

The per-passenger fee that Adani Enterprises will pay the AAI is expected to be lucrative for the government as the passenger count has been steadily increasing over the past few years in these five airports. The airport operator can recover the fee from the passengers.

In 2017-18, more than 25 million domestic and international passengers used the five airports Adani Enterprises has won, according to estimates. The passenger traffic growth has been 78 per cent since 2014-15. A report in the Business Standard says the traffic growth at these five airports has been higher than at all 20 international airports in India, and greater than that recorded at other joint venture airports like Delhi and Mumbai in which AAI gets a fixed revenue share from operators like GMR and GVK, respectively.

Ahmedabad had the highest footfall at 9.2 million international and domestic passengers flying in 2017-18. The year-on-year growth was 24 per cent. The traffic through the airport grew by over 80 per cent since 2014-15, the report says. A similar growth trajectory could bring more than 33 million passengers to the airport by 2024-25.

Reports suggest Adani apparently quoted a fee of Rs 177 per passenger for Ahmedabad, raising the prospect of AAI earning Rs 530 crore from the airport by 2024-25. This alone would amount to a fifth of what the AAI earns from airports like Mumbai and Delhi now, sources say.

The Adani group's second highest bid was for Jaipur (Rs 171 per passenger) followed by Lucknow, Thiruvananthapuram and Mangalore in that order. Since 2014-15, the airport traffic has surged more than 70 per cent in Mangalore and Lucknow. Thiruvananthapuram airport's passenger traffic has grown by a third while Jaipur's more than doubled since the Modi government came to power. The passenger growth in these airports was higher than in busier airports like Delhi and Mumbai. Passenger traffic at Delhi and Mumbai increased 14 per cent and 7 per cent respectively in 2017-18.