Wednesday, March 31, 2021

How the AERA bill will impact the government's airport privatisation plan

The Narendra Modi-led government has made privatisation of public sector undertakings (PSUs) and asset monetisation cornerstones of its economic agenda. And as part of the Rs 2.5 lakh crore asset monetisation plan, the central government is also looking to sell its residual stake in airports.

As per reports, the government is looking to raise Rs 20,000 crore in 2021-22 and is all set to sell its residual stake in Delhi, Mumbai, Bengaluru and Hyderabad airports. Furthermore, the government has identified 13 more airports run by the Airports Authority of India (AAI) for privatisation.

In a bid to expedite its assets monetisation plan and for faster development of smaller airports in the country, the Central government on March 24 introduced the Airports Economic Regulatory Authority of India (Amendment) Bill, 2021 (AERA bill).

The AERA bill intends to change the definition of ‘major airport’ in India and under the bill, the central government may designate any airport as a major airport by a notification. The bill adds that the central government may group airports and notify them as one major airport.

The move is expected to help make smaller airports more attractive for private players to redevelop and operate under the public-private partnership model, market experts and analysts said.

“Airports like Kanpur, Gorakhpur, Agra and Aligarh are examples of airports that can be clubbed together as a ‘major airport’ and then bids can be invited for their operation and redevelopment,” a Delhi-based industry expert said.

He added that airports in Nashik, Aurangabad and Nagpur can also be grouped together to be redeveloped and operated.

31/03/21 Yaruqhullah Khan/

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