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AAI signs agreements to allow Adani to take over 3 airports

AAI has signed 3 agreements with Adani Group for the operation, management and development of Ahmedabad, Lucknow and Mangaluru airports
New Delhi: Airports Authority of India (AAI) signed three agreements with Adani Group on Friday for the operation, management and development of Ahmedabad, Lucknow and Mangaluru airports through PPP mode. The Concession Agreements have been signed with three entities, ie Adani Ahmedabad International Airport Ltd, Adani Lucknow International Airport Ltd and Adani Mangaluru International Airport Ltd, respectively. With the signing of these agreements, AAI has granted rights to the Adani Group for running these airports for a limited period of time. The agreements were signed by BK Mehrotra, Executive Director, Strategic Initiative Unit, on behalf of AAI and Behnad Zandi, Chief Executive Officer, Airports Adani Enterprise Ltd. at the Corporate Headquarters of AAI in the presence of Chairman, AAI, Board Members and other senior officials of AAI and Adani Enterprises Limited.

What does the AAI-Adani agreement entail?

The concessionaires, Adani Ahmedabad International Airport Ltd, Adani Lucknow International Airport Ltd and Adani Mangaluru International Airport Ltd, are now required to take-over the Ahmedabad, Lucknow and Mangaluru airports after fulfilling certain condition precedents within 180 days from February 14. They will now operate, manage and develop the airports for the next 50 years, in accordance with the terms and conditions specified in the Concession Agreements.

Will Adani pay AAI under the agreement?

The concessionaires shall pay AAI a per passenger domestic fee of Rs 177.00, Rs 171.00 and Rs 115.00 for Ahmedabad, Lucknow and Mangaluru Airports, respectively (both embarking and disembarking passengers). In the case of international passengers, the concessionaire will pay two times the domestic fee per passenger. Further, the per passenger fee will be revised annually, taking into account the variation in the CPI (IW). The concession fee that AAI would receive will be utilised for the maintenance and development of other brownfield airports and the development of RCS –UDAN and other greenfield airports across the country, AAI said.

The backdrop

An International competitive bidding process for PPP transaction for six airports (viz. Ahmedabad, Lucknow, Mangaluru Guwahati, Jaipur and Thiruvananthapuram,) was initiated by AAI in December 2018. Adani Enterprises Limited had emerged as the highest bidder for these airports. During July 2019, the Central Government conveyed the approval for the award of concession to the highest bidder for Ahmedabad, Lucknow and Mangaluru airports. In respect of the remaining three airports, the approval of the Central Government is awaited.