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Privatising small airports not the right approach: GMR official

Press Trust of India  |  New Delhi 

Privatising small airports would not be the right approach for the government as they need to be viable in terms of passenger size and growth projections, a of said.

"If the government wants to look at privatising small airports, in my view that is not the right approach. The right approach would be that they look at privatising more profitable airports, which now they are doing," Sidharath Kapur, executive director and board member, GMR Airports, said at CAPA Airports Summit 2019 here.

The has invited bids for privatisation of six airports -- Lucknow, Jaipur, Ahmedabad, Guwahati, and These airports are currently under the control of the of (AAI).

"I think there is always a minimal size where an is viable (for privatisation)," Kapur said.

"The cost recovery models of these assets demand that there should be certain minimum traffic size. I guess 2.5 million to 3 million passengers (per year) is the ideal traffic size to make sense. And based on that, the growth coming makes sense of the large capex (capital expenditure) involved," he added.

Kapur said -- that currently manages and airports in -- does not mind looking at smaller assets. "But in all these assets we see if there is a huge growth potential. All the Indian assets, especially the smaller ones, and the ones which are currently under privatisation, the growth potential is huge," he added.

However, he added that "smaller airports do not make much sense from a private concessions point of view".

He said the government should focus on building smaller aerodromes from the revenues of bigger airports that have been privatised.

"and constitutes 85 per cent of the revenues of the This can contribute to the kitty of the government and they can use this cash to construct infrastructure in underdeveloped and developing areas. Where there are no airports, they can build some airports, even if the traffic is around 100,000 passengers," he said.

He said his company is not averse to greenfield airports either. "We continue to look at them. Our preference, as anyone's else preference is, brownfield assets that are running assets. The construction risk is not really there," he said.

"I would call the Indian greenfield assets as not truly greenfield. I would say they are more of a whitefield because in most cases -- except which was an exception -- the existing is shutdown," he said. "Our and (airports) are for sure large assets...we will continue to look at international forays. We will continue to look at domestic assets because that is our home market," he stated.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 14 2019. 15:45 IST
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