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Box 6: Privatization in the Aviation sector

Disinvestment of Air India: The process for disinvestment of Air India and its subsidiaries commenced
in June 2017 with the ‘in-principle’ approval of Cabinet Committee on Economic Affairs (CCEA). CCEA
also approved creation of an Air India Specific Alternative Mechanism (AISAM) for the disinvestment
process. The AISAM decided the strategic disinvestment of 100percent stake of Government of India
in Air India along with 100percent stake in Air India Express Ltd and 50percent stake in Air India SATS
(joint venture between Air India (AI) and Singapore Airport Terminal Services (SATS).
Subsequently, M/s Talace Pvt Ltd, a wholly owned subsidiary of M/s Tata Sons Pvt. Ltd which
was the highest bidder was awarded 100percent equity shareholding in Air India along with equity
shareholding of Air India in Air India Express Ltd. (AIXL) and AISATS. The winning bid was for
Rs 18,000 crore as Enterprise Value (EV) consideration for AI (100percent shares of AI along with
AI’s shareholding in AIXL and AISATS). Share - Purchase Agreement has been executed on 25th
October, 2021 and the transaction is likely to be completed by December 2021 - January 2022.

Privatization of Airports: In order to improve efficiency and performance, service quality,encourage
greater investment and to reduce government influence, Airports Authority of India (AAI) has awarded
six airports namely, Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru for
Operations, Management and Development to the highest bidder i.e., M/s Adani Enterprises Limited
(AEL) under Public Private Partnership (PPP) mode for a lease period of 50 years. Besides, AAI had
leased out Delhi and Mumbai Airports in 2006 to M/s Delhi International Airport Limited and M/s Mumbai
International Airport Limited respectively for Operations, Management and Development under PPP
mode for a period of 30 years. As per National Monetization Pipeline (NMP), 25 AAI airports have been
earmarked for asset monetization over the years 2022 to 2025 namely Bhubaneshwar, Varanasi, Amritsar,
Trichy, Indore, Raipur, Calicut, Coimbatore, Nagpur, Patna, Madurai, Surat, Ranchi, Jodhpur, Chennai,
Vijayawada, Vadodara, Bhopal, Tirupati, Hubli, Imphal, Agartala, Udaipur, Dehradun and Rajahmundry.

The criteria adopted for Monetization of airport assets under NMP is as following:
(i) Airports having annual traffic above the threshold of 0.4 million passengers (in 2019 and2020);
(ii) Airports with a sizeable ongoing/proposed capex plan as per the National Infrastructure Pipeline (NIP).

Ports

8.54 Port performance in an economy is crucial for trade competitiveness of that economy.
Expansion of port capacity has been accorded the highest priority by the Government through
implementation of well-conceived infrastructure development projects. The capacity of 13major
ports which was 871.52 million tonnes per annum (MTPA) at the end of March 2014, has
increased by 79 percent to 1,560.61 MTPA by the end of March 2021. Traffic handled at these
ports was to the tune of 672.68 MT during 2020-21, which was 4.6 percent lower than that
in the previous year on account of the worldwide disruptions in international trade due to the
pandemic. The average turnround time at these major ports has reduced from 62.11 hours in
2019-20 to 55.99 hours in 2020-21 (Figure 33) due to the various measures taken by government
to improve the ease of doing business.