Clipping wings: Cap on airport ownership likely

After Adani won all 6 airports in previous round, new rules may be enforced before next round of privatisation

With the Adani Group emerging as the largest player in the airports business in terms of number of projects after it struck a deal last month to acquire controlling stake (74%) in Mumbai International Airport (Mial) from the GVK Group and other partners, the ministry of civil aviation is planning to restrict the number of airports an operator can get under the public-private partnership model.

The government is likely to invite bids for privatisation of Varanasi, Calicut, Patna, Amritsar, Bhubaneswar, Ranchi, Coimbatore, Trichy, Indore, and Raipur airports in the next round and the cap is likely to be placed before that, sources said.

In the last round of airport privatisation in 2019, the Adani Group had bagged all the six airports and recently the government completed the exercise of awarding all of them on lease to it. However, the Adani Group is yet to sign the concession agreement and take charge of them. The airports are: Jaipur, Guwahati, Thiruvananthapuram, Mangaluru, Ahmedabad and Lucknow.

Though the civil aviation ministry had once in the past also discussed placing caps on the number of airports a private operator can bid for, nothing actually was done on it. However, the recent acquisition of GVK airport in Mumbai, which would also give control of the upcoming Navi Mumbai airport to the Adani Group, the ministry has once again the activated the proposal, sources said.

As reported earlier, the Adani Group, through its Adani Airport Holdings (AAHL), will take over GVK Airport Developers’ debts, and also acquire Bidvest and Airports Company of South Africa’s stake in Mial. GVK ADL is the holding company through which GVK Group holds 50.50% equity stake in Mial, which in turn holds 74% equity stake in Navi Mumbai International Airport.

The Adani Group, apart from acquiring the 50.5% stake of GVK Group, will also acquire 10% of Airports Company of South Africa and 13.5% of Bidvest. The balance 26% is held by the Airports Authority of India (AAI).

With the GVK deal and the earlier award of six airports, the Adani Group will emerge as the country’s second-largest airport operator in terms of number of passengers handled, after the GMR Group, which operates the Delhi and Hyderabad airports. If Adanis seven airports, including Mumbai International Airport (Mial), are taken into account, they handled a total of 75 million passengers in FY20. GMR’s Delhi and Hyderabad handled 85 million passengers.