Wednesday, July 19, 2017

AAI to bear capex for two airports

New Delhi: The Airports Authority of India (AAI) will bear the capital expenditure at Jaipur and Ahmedabad airports even as private developers will only need to concentrate on operations and maintenance (O&M) of the two airports whose terminal buildings are set to be privatised.

“The AAI has re-examined the issue related to the project financials of the O&M project for Ahmedabad and Jaipur airports. The concept of project cost will be different in case of these two airports as against the model adopted for privatisation of other airports, including Delhi and Mumbai airports,” said a senior civil aviation ministry official, requesting anonymity.

“The successful bidder for the airport projects will not be required to make capital investments into the airport as AAI will bear such cost,” the official added.

The decision was taken after a meeting among the AAI, Civil Aviation Ministry and the Prime Minister’s Office recently in a bid to make the airport deal lucrative for both domestic and international players.

“The private operators who had shown interest in running the terminal building of the two airports had opined that the scope of revenue generation was limited in the O&M model so they may not find it viable to incur capital expenditure,” another civil aviation ministry official said.
19/07/17 Somesh Jha/The Hindu