Is privatisation of airports like Jaipur beneficial? How could the PPP model be launched for airports? With the present scenario what structural policy change need to do in it?
- Alok Dharpure
Privatisation of airports like Jaipur will bring in contractually committed level of efficiency in operations and planning. It would also add another stakeholder in attracting tourists to the city. However, good airport operators would be interested only if the PPP model provides predictability and certainty. The revenue share model (between airport and Airports Authority of India) and the regulatory framework (between airport and Airports Economic Regulatory Authority) are not sufficiently aligned, leaving the airport operator with financial uncertainties. A pre-determined revenue cap framework (for regulation) and a capped revenue share (with AAI), even if limited to the first 10 years, could provide a structure that is compatible with the risk appetite of infrastructure investors (ie low risk steady returns).
- Alok Dharpure
Privatisation of airports like Jaipur will bring in contractually committed level of efficiency in operations and planning. It would also add another stakeholder in attracting tourists to the city. However, good airport operators would be interested only if the PPP model provides predictability and certainty. The revenue share model (between airport and Airports Authority of India) and the regulatory framework (between airport and Airports Economic Regulatory Authority) are not sufficiently aligned, leaving the airport operator with financial uncertainties. A pre-determined revenue cap framework (for regulation) and a capped revenue share (with AAI), even if limited to the first 10 years, could provide a structure that is compatible with the risk appetite of infrastructure investors (ie low risk steady returns).
You’ve reached your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%