Monday, November 23, 2020

Search for new private partner to operate Nagpur airport soon

Nagpur: After GMR’s bid to take over Nagpur airport was cancelled, there are now plans to appoint a fresh private partner for the airport on per passenger revenue sharing model. This is in line with the method adopted by Airports Authority of India (AAI) for privatizing the airports in its possession. Earlier, a fixed share of total revenue was offered by the private partner for Nagpur airport.

GMR Airports had emerged as the highest bidder, offering 14.49% of the total revenue in bulk for operating the Nagpur airport. The tender was cancelled in May this year. This was because Nagpur airport’s current earnings itself are more than what it would have got as revenue share from GMR as a private partner.

“Now, the process of appointing a fresh transaction consultant for the airport privatization is expected to start from next month onwards,” said airport director Abid Ruhi of Mihan India Limited (MIL), the current operator.

MIL is a joint venture between Airports Authority of India (AAI) and state government’s Maharashtra Airports Development Company (MADC). It plans to offload stake to a private partner, which in turn will invest for the airport development by bringing in new infrastructure.

Ruhi told the transaction consultant will formulate the privatization process. Ernst & Young was the consultant in the earlier round.

The new per-passenger model is different from the old plan. Under the new plan the revenue will be pegged on per passenger arrival and departure. The revenue to be received by MIL will increase in direct proportion to the passenger traffic, said Ruhi.

Sources said under the per-passenger model, the private operator will have to pay a fixed charge on the basis of each passenger using the airport in a given period of time.

“There may be fixed space for leasing out on rent. However, the number of passengers can always increase with time. With this, the per passenger share for MIL can always vary from period to period,” he explained.

Appointing the transaction consultant will be the first step towards roping in the private partner, he said.

Meanwhile, the passenger traffic at Nagpur airport remains around half of the pre-lockdown levels. The airport had shut on March 26 and reopened on May 23.

23/11/20 Shishir Arya/Times of India

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