Cabinet approves proposal for leasing out Jaipur, Guwahati and Thiruvananthapuram airports

The Union Cabinet on Wednesday approved the proposal for leasing out Jaipur, Guwahati and Thiruvananthapuram airports. After the Cabinet meeting, Union Minister Prakash Javdekar announced at a press conference that the three airports owned by the Airports Authority of India (AAI) will be leased out through Public-Private Partnership.

New Delhi: The Union Cabinet on Wednesday approved the proposal for leasing out airports at Jaipur, Guwahati and Thiruvananthapuram through public-private partnership (PPP).

After the Cabinet meeting held today, Union Minister Prakash Javadekar briefed the media and said, "Union Cabinet has approved a proposal for leasing out Jaipur, Guwahati, and Thiruvananthapuram airports, of Airports Authority of India, through Public-private partnership."

"With this, Airports Authority of India will secure approximately Rs 1070 crore and it can be used to develop more airports in small cities and towns," said Javadekar.

The Union Minister further added that these airports will be given to the private sector for 50 years only, after which they will return to AAI.

In the first phase of privatisation under the Modi government, six airports in Ahmedabad, Mangalore, Lucknow, Guwahati, Thiruvananthapuram and Jaipur were cleared for development through public-private partnership model in February 2019.

Notably, after a competitive bidding process, Adani Group won the rights to run all the six airports. However, the group signed the concessionaire agreement with the AAI for three airports- Ahmedabad, Lucknow and Mangaluru and it is yet to sign the concessionaire agreement for the other three airports.

Adani Group was expected to take over the three airports within six months i.e. by August 2020, but the group had asked the AAI to invoke the force majeure clause to postpone the payment deadline citing disruption caused by the Covid-19 pandemic in the aviation sector.

The AAI had in September 2019 recommended the Civil Aviation Ministry for the privatisation of airports in Amritsar, Varanasi, Bhubaneswar, Indore, Raipur and Trichy.

Rating agency ICRA had said that domestic air passenger traffic is likely to witness a de-growth by 41-45 per cent during 2020-21. ICRA had said that the domestic airlines witness a rather slow uptick in capacity in July 2020 despite recommencement of operations over two months ago.

The aviation sector has been hit hard by coronavirus pandemic with airlines cancelling international flights and inconsistency among the state governments regarding quarantine rules for air passengers.

India resumed domestic passenger flights on May 25 after a gap of two months amid the coronavirus pandemic.