Other major airports may follow, and India can now hope to get airports that it does not have to be embarrassed about. The successful bidder(s) will take charge of the airports some time next year and will then be required to invest around Rs 5,000 crore in the two airports put together.
The government will have a say through the Airports Authority of India (AAI), which will be present on the board as a sort of passive partner. No transfer of asset ownership is to take place.
In that sense, only the management and operations are being privatised. So what is being presented as privatisation is actually no more than a lease deal for 30 years, with possible renewal for subsequent periods. And therein lie two questions.
The first is, what will the government do if the leaseholder not only falls short of service benchmarks but also overcharges for them? The virtual monopoly will certainly be an incentive to do so.
