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AAI to relook at borrowing plan as govt prepares to privatise more airports

Updated : July 27, 2019 05:55 PM IST

Privatisation of state-run airports has decreased the capital expenditure requirements and borrowing needs for state-run airport operator, Airports Authority of India (AAI), and the organisation is now tweaking its borrowing roadmap taking into account the income from the newly privatised airports.

In an exclusive interaction, AAI chairman Guruprasad Mohapatra, who will take charge as secretary, Department for promoters of Industry and Internal Trade from August 1, said that more airports are in the pipeline for privatisation.

Privatisation of six airports is seen as the most important development at Airports Authority of India in the recent past. Is the government looking at privatising more airports?

Privatisation has not been attempted for the first time. Earlier also, the airports of Delhi and Mumbai were privatised by the AAI and the ministry. But, this time the decision of the Union Cabinet was to go for disinvestment of six airports. So many Airports at one go and that too without losing any time was a big challenge for us. I am very happy that we did it in a record time, probably the fastest privatisation in independent India's history because of strong teamwork at AAI, strong support from ministry and Union Cabinet which endorsed those decisions.

It is a matter of happiness for us that the first privatisation where eight to nine bids were received and at quite good prices. Everything has been done on merit and there have been no controversies that are typical in this sort of massive exercise. It has been very satisfying.

For three airports, the Cabinet has approved the bids, letter of award has been given and their (Adani Group) acceptance has come. Now they have to obtain security clearance and there are a lot of processes thereafter. Two more, Jaipur and Guwahati are under consideration of the ministry for Cabinet approval. Trivandrum is also under consideration of the ministry.

Thereafter, in the 100 days programme of the newly formed government, there are some more airports to be taken up (for privatisation).

What is the criteria for selection of airports for privatisation?

We had appointed a consultant to identify and follow a ranking system with usual parameters like number of passengers, capacity of airport to sustain flight operations for some more time, city-side land monetisation, scope of the airport to sustain more operations, cargo potential, flying habits, economy of the city, how thriving is the state. Out of that list, these six airports were picked up by the Cabinet for privatisation.

We are re-looking at those parameters. Though I cannot tell you the names and the number, but a significant number of airports will come up for consideration of the government for privatisation.

Is AAI looking at tweaking its borrowing plan given increased income from privatised airports?

As you know, because of the huge infrastructure gap that existed between demand and supply factor, the ministry and AAI decided in 2014-15 to focus real big-time on investments so we made an ambitious plan that we will spend Rs 25,000 crore in boosting infrastructure ability in all our AAI airports to the extent possible. A lot of work has started and I can tell you that our capex which was roughly around Rs 1500 crore, four year back, is now Rs 5,000 crore this year so a significant jump. Today, projects worth Rs 25,000 crore are at various stages of implementation all over the country.

We had made a borrowing plan around Rs 7,000 crore to be raised over a period of next two to three years. We appointed a consultant and one round of discussion has been done. It is being fine-tuned.

Meanwhile, in the wake of privatisation of six airports and some more which are going to come, we are re-looking at the capex plan as well as the borrowing plan. So, once we know the next round of airports that the government is divesting, and depending on the date of disinvestment and when the management changes hands, this entire borrowing plan and capex plan is being re-looked.

Any comments on your new role as secretary, department for promotion of Industry and Internal Trade?

Too early for me to say anything. I have not even joined there. I can tell you this that I have worked in the ministry of commerce before I came to civil Aviation. It's a very challenging sector as it deals with industrial policy, what kind of right policy framework that will boost investment, that will boost employment, and that will boost a whole lot of factors of the economy , economy multiplier effect. So I am yet to go there and I need to study there but I realise the tremendous challenges that wait for me there in that sector and I am sure we will do a good job there.

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