Is private investment likely to materialise for the enormous challenge of developing airport infrastructure in the country? That’s the million-dollar question facing the aviation sector. For, regulatory uncertainties and unrealistic terms of reference for concession agreements, coupled with mid-way reviews impacting revenue streams, have stopped investors from loosening their purse strings thus far.
The Airports Authority of India (AAI) was left red-faced recently after failing thrice to get a single bid for the privatisation of brownfield airports at Jaipur and Ahmedabad. The PPP model under which the government had privatised airports at Delhi and Mumbai for a fixed tenure is already showing signs of strain, forcing it to take a hard look at the way concession agreements are drawn up and have a consultative discussion with experts and stakeholders. A framework or a model-concession agreement is likely to be out in August, sources say.
Why the need for private money? Padma Priya J, director, Grant Thornton, India, says the sector would need $25 bn of investment between 2016 and 2026. “India is now the third largest aviation market after US and China. Meeting the growing demand is a task which cannot be handled by the government alone.”
23/07/18 Financial Express
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The Airports Authority of India (AAI) was left red-faced recently after failing thrice to get a single bid for the privatisation of brownfield airports at Jaipur and Ahmedabad. The PPP model under which the government had privatised airports at Delhi and Mumbai for a fixed tenure is already showing signs of strain, forcing it to take a hard look at the way concession agreements are drawn up and have a consultative discussion with experts and stakeholders. A framework or a model-concession agreement is likely to be out in August, sources say.
Why the need for private money? Padma Priya J, director, Grant Thornton, India, says the sector would need $25 bn of investment between 2016 and 2026. “India is now the third largest aviation market after US and China. Meeting the growing demand is a task which cannot be handled by the government alone.”
23/07/18 Financial Express
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