Airport privatisation enters new phase as Adani Group wins bids to operate 5 airports

With the large quantum of investments that will go into these airports, the infrastructure and services will be greatly augmented; in the medium to long term, that will augur well for the airport advertising business

Airport privatisation entered a new phase as corporate major Adani Group emerged the highest bidder for 5 airports in the tenders floated by Airport Authority of India (AAI) for the operation, management and development of 6 airports. Adani Group made the highest bid for Ahmedabad Airport (Rs 177 crore), Jaipur (Rs 174 crore), Lucknow (Rs 171 crore), Thiruvananthapuram (Rs 168 crore) and Mangaluru (Rs 115 crore).

The bids, except for the 6th airport (Guwahati Airport) was opened on February 25 at 11AM. Notably, GMR Airports which has already developed the IGIA, Delhi and RGIA, Hyderabad, quoted merely Rs 85 crore for Ahmedabad Airport, Rs 69 crore for Jaipur Airport, Rs 63 crore for Lucknow Airport, Rs 63 crore for Thiruvanthapuram Airport and Rs 18 crore for Mangaluru Airport.

In all there were 26 bids from 9 companies for the 5 airports, which handled a total of around 3 crore passengers last year.

Adani Group, which has a domineering presence in the ports sector, among a host of other industries, is foraying into airport development for the first time. The Group has won the bids to acquire the operation, maintenance and development rights for 50 years each.

In the process, advertising firms that currently hold the media rights at these airports will be paying their license fee to the Adani Group instead of AAI, once the LoA is issued and the contractual processes are complied with. In all cases, the novation clause will apply, thereby protecting the rights of existing media concessionaires at these airports.

On a larger plane, with the large quantum of investments that will go into these airports, the infrastructure and services will be greatly augmented. In the medium to long term, that will augur well for the airport advertising business.