India To Privatize 11 Airports

The Indian government plans to award 11 airports in 5 bundles to private players under a public-private-partnership model. The Ministry of Civil Aviation has said that eligible technical experience would not be restricted exclusively to the aviation sector, allowing multiple players to bid for these airports.

There are plans to invest Rs 8600 crore in these airport projects. This move is expected to attract a wide range of bidders, including those with experience in infrastructure development outside of the aviation sector.

The Airports Economic Regulatory Authority of India (AERA) has recently cut the user development fee (UDF) for domestic passengers departing from Hyderabad’s Rajiv Gandhi International Airport by more than 30%. The new tariff order for Hyderabad airport provides clarity on aero tariffs for the next five years (FY27–31).

## Why it matters The privatization of these airports is a significant development in India's infrastructure sector. The investment of Rs 8600 crore is expected to improve the quality of services and infrastructure at these airports. The move is also likely to attract foreign investment and create new job opportunities.

The decision to allow bidders with relevant cross-sectoral infrastructure experience to participate in the process is a significant departure from the traditional approach of restricting eligibility to players with exclusive aviation experience. This is expected to increase competition and bring in new ideas and expertise to the sector.

## What happens next The Ministry of Civil Aviation will now proceed with the bidding process, with the expectation of attracting a wide range of bidders. The successful bidders will be responsible for operating and maintaining the airports, as well as investing in infrastructure development. The privatization of these airports is expected to be completed in the near future, although a specific timeline has not been announced.

In related news, Air India has requested about $1.5 billion in fresh equity from owners Tata Sons and Singapore Airlines. The transformation of Air India involves complex, multi-year operational and integration challenges. Temasek Holdings, the majority shareholder of Singapore Airlines, has backed the airline's investment in Air India, viewing it from a long-term perspective.