AAI mulls PPP cure for 15 defunct airports

The Airports Authority of India plans to privatise 15 out of 40 non-operational airports across the country on a public-private partnership basis to make them function again.

"Out of 40 non-operational airports, 15 have the potential to operate and we have planned to give the airports to private developers to operate it for a concession period," said a top AAI official, who did not wish to be identified.

The airports to be given to private companies are in Rajasthan, Orissa, Bihar, Uttar Pradesh, Jharkhand and north-eastern states.

"We are working on the proposal for the same but it would be good enough to attract private participation," the official added.

The government-owned airport authority owns and manages 125 airports, of which only 85 are operational. Of these 85, only 13 are making profits. The authority plans to increase the number of profit-making airports to 25 by the end of the next financial year.

"We are planning to develop the city side of these airports through private participation and make them profitable through non-aeronautical revenue. This will decrease our dependency on air traffic to make our airports profit making," said the official mentioned above.

AAI is upgrading 35 non-metro airports with an estimated investment of Rs 12,434 crore and is looking at various ways to raise money. The authority did not receive permission from the finance ministry to raise Rs 5,000 crore through tax-free bonds, forcing other options.

AAI has planned to seek five years' revenue from the government as compensation for the closure of its Bangalore and Hyderabad airports to make way for new and privately-run ones. It is also negotiating loans with various financial organisations. It earned Rs 4,186 crore and made a profit of Rs 687 crore in 2008-09.