After railways, aviation ministry is considering private players for building airports

A few days back, we had reported how Indian Railways is willing to offer a relief period of 60 years to private investors who invest in stations’ re-development.

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Now, aviation ministry is also looking forward to auction its future airport contracts to private operators after setting fixed tariffs, which would potentially enhance the number of serious bidders and cushion passengers against arbitrary increases in user fees.

"Airport charges are revenues for airport operators and any change in it impacts their top-line. We would fix that in advance and make the bidders aware of it so that there are no uncertainties or surprises for the airport operators as well as passengers using the airport. In this case, charges will be pre-determined, and (the move) would require a change in the Airports Economic Regulatory Authority (AERA) Act," a senior government official, told ET.

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The process to amend the AERA Act has been started by the aviation ministry. AERA is authorised to regulate Indian airports, and fix tariffs at all major airports, that have an annual footfall of at least 1.5 million passengers.

As per sources, AERA and aviation ministry officials have already held a meeting, with AERA approving the proposal.

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"It would help the government get bids from a large number of serious players. Any transparency and clarity in airport projects would help bidders plan much better and I would want the government to bring as much clarity in bids as possible. A large number of international players were interested in the Navi Mumbai airport project but they did not bid, primarily, because of less clarity on bids post the award," said industry analyst Sanjay Sethi, CEO of Nestor Consulting, an infrastructure advisory.
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