The government is going to make big changes regarding airport privatization in the country. Now any one company will not be able to take control of many airports. The government is considering setting limits in the bidding process, so that competition increases and the possibility of monopoly is reduced. A new policy is being prepared for the proposed privatization of 11 airports, which also includes a plan to balance development by connecting small and big airports.
The government is preparing to make a major policy change in the next phase of airport privatization in India. It is proposed that only a limited number of airports be given to any one company, so that there is competition in the sector and the market is not concentrated in the hands of a single player. According to ET report, serious discussions are going on to change the rules before the bidding process for the privatization of 11 airports. The last time privatization took place in 2018, there was no such limit and Adani Enterprises won the bids for all six airports. This time the government wants to avoid repeating the same situation.
Under the proposed model, only a maximum of two blocks i.e. four airports can be given to any company. If the same company makes the highest bid for the third block, then the second placed company will be given a chance to match that bid. The purpose of this step is to maintain competition and give opportunities to new players. NITI Aayog, Civil Aviation Ministry and Finance Ministry are working together on this policy. The final approval will be given by the Public-Private Partnership Appraisal Committee (PPPAC).
This is also the plan
This time the government is also going to implement a new cluster model. Under this, big and small airports will be given together in a package, so that less profitable airports can also be developed. For example, Varanasi will be connected with Kushinagar and Gaya, Amritsar with Kangra.
However, there are some concerns regarding this proposal. Officials believe that if strict limits are imposed on bidding, companies may avoid aggressive bidding, which may reduce the revenue received by the government. Aviation sector expert Kapil Kaul (CEO, CAPA India) says that this step can prove to be better for the sector in the long run. This will increase competition and passengers will get better services, but the government will have to maintain a balance so that the enthusiasm of investors also remains.
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