Govt to shed AAI stake in Delhi, Mumbai airports

Once approval comes through, the Government is likely to sell the remaining shareholding of AAI in these four key airports.

HAVING EMBARKED on an ambitious asset monetisation drive to raise additional resources, and hoping to raise Rs 20,000 crore through sale of assets under the Ministry of Civil Aviation in 2021-22, the Government is looking to divest the remaining equity stake held by Airports Authority of India (AAI) in the Delhi, Mumbai, Bengaluru and Hyderabad airports.

The Indian Express has learnt that in the meeting of Core Group of Secretaries for Asset Monetisation (CGAM) held on February 8, an update was provided that the Ministry of Civil Aviation has identified 13 AAI airports to be monetised through the OMDA (Operation, Management, Development Agreement) model and that a transaction advisor has been appointed.

While it was proposed to explore the clubbing of profitable and non-profitable airports “to make the package attractive,” sources confirmed that the Ministry would obtain requisite approvals for the divestment of equity stake of AAI in the joint ventures for the Delhi, Mumbai, Bengaluru and Hyderabad airports.

Once approval comes through, the Government is likely to sell the remaining shareholding of AAI in these four key airports.

Currently, AAI holds 26 per cent stake each in the Delhi and Mumbai airports, 13 per cent in Hyderabad and 13 per cent in the Bengaluru facility. The GMR Group owns 54 per cent stake in the Delhi airport, while Adani Group hold 74 per cent in the Mumbai airport. In addition to these four airports, AAI holds 49 per cent stake in Nagpur, 7.47 per cent in Kannur, and 51 per cent in Chandigarh.

Striking a balance

The stake sale will lift the Government’s asset monetisation programme to drive development projects and boost economic activity. But AAI’s equity presence is also important because it ensures crucial oversight, especially in terms of keeping user costs within reasonable limits.

Last year, the Government had privatised six airports — Ahmedabad, Lucknow, Mangalore, Jaipur, Guwahati and Thiuvananthapuram — and the AAI Board approved leasing of at least six more for undertaking operations, management and development through PPP.

Finance Minister Nirmala Sitharaman, while presenting the Budget for 2021-22 in February, had said that as part of its asset monetisation programme, the Government plans to privatise AAI-owned airports in tier-2 and tier-3 cities.

Shortly after the Budget, Civil Aviation Secretary Pradeep Singh Kharola had said that AAI was exploring a new model wherein a profitable airport and a non-profitable airport will be clubbed together before being brought to the table.

The Government has set an ambitious target of around Rs 2.5 lakh crore through asset monetisation in 2021-22, comprising various asset classes across eight ministries.

Sources confirmed that the Ministry of Railways has a target of over Rs 90,000 crore for the year FY’22, Department of Telecom Rs 40,000 crore, Ministry of Road Transport & Highways Rs 30,000 crore and Ministry of Power Rs 27,000 crore. The Ministries of Civil Aviation, and Youth Affairs and Sports, have targets of Rs 20,000 crore each for FY’22.

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