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Privatisation of airports brings in contractually committed level of efficiency: Manish Agarwal

Manish Agarwal, partner and Leader capital project & infrastructure, PwC India, answers queries on what to expect for airports from Budget 2015-16

Manish Agarwal 

Manish Agarwal

Is privatisation of like Jaipur beneficial? How could the PPP model be launched for With the present scenario what structural policy change need to do in it?
- Alok Dharpure

Privatisation of 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).

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First Published: Tue, February 10 2015. 17:48 IST