India prepares for privatization of six airports

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The government of India has decided to tender PPP concessions for six airports located around the country: Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati. The Airport Authority of India (AAI) will hold minor stake in all of the airports, with the selected private partners to hold up to 75% stakes in their respective airport.

This follows the success of the concessioning of Delhi and Mumbai airports, which were handed to GMR and GVK, respectively, in 2006. Both concessions follow a revenue-sharing model, in which a specified share of gross revenue is given to the AAI. All the six airports will follow the same revenue-sharing model.

Previous attempts to privatise airports in India under other models have failed. Operation and maintenance contracts for Ahmedabad and Jaipur airports have been offered to private investors multiple times - most recently a tender for the projects was cancelled after AAI received only one qualified bid.

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