POLITY AND GOVERNANCE- AIRPORT PRIVATIZATION PROCESS

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Context: The Union Cabinet in November 2018 decided to introduce private players for operation, management and development through a public-private partnership (PPP) model for six airports in India.

  • “In-principle” approval for leasing out six airports of AAI viz. Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru for operation, management and development under Public Private Partnership (PPP) through Public Private Partnership Appraisal Committee (PPPAC).
  • Constitution of an Empowered Group of Secretaries headed by CEO, NITI Aayog with Secretary, Ministry of Civil Aviation, Secretary, Department of Economic Affairs and Secretary, Department of Expenditure to decide on any issue falling beyond the scope of PPPAC.

Recommendations of Finance Ministry and NITI Aayog not accepted

  • Finance Ministry recommended not to award the same private player more than two airports out of a total of six airports to be privatised.
  • NITI Aayog recommendedthe requirement of prior experience in operation and management (O&M) as well as providing the total project cost up front for each of the airports, to better determine the financial capability of interested players.
  • PPAC dismissed the suggestions and Cabinet on 3rd July, 2019, approved the proposal for leasing out of three airports viz. Ahmadabad, Lucknow and Mangaluru of Airports Authority of India (AAI) through Public Private Partnership (PPP) to the highest bidder i.e. M/s. Adani Enterprises Ltd. for a lease period of 50 years

This has raised suspicion among the opposition parties and the process of privitisation has come under question.



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