GIP, I Squared, among heavyweights in pre-bid talks for six Indian airports

AMP Capital, Brookfield, GIP and I Squared Capital are among the infrastructure players considering bids for six Indian airports that are set to be privatised during the first half of this year, two sources close to the government told Infrastructure Investor.

The Airport Authority of India held pre-bid talks with several prospective investors last week, according to the sources.

The firms declined to comment or did not reply to requests for comment.

Investors have complained about the short time they’ve been given to prepare bids for the six assets, which must be submitted no later than 14 February, one of the sources said.

Plans to privatise the Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram (Trivandrum), and Mangaluru airports were officially approved last November by the Indian Cabinet, which aims to finalise the tender process by the end of February.

According to one of the sources, the government wants to wrap up the process before the next general Indian elections, scheduled for April or May, and sees the current timeframe as “non-negotiable”.

In order to simplify the bidding process, officials and private investors discussed the possibility of bidding for a single asset instead of the whole bundle, but the option was ultimately rejected, one of the sources said. “The sense that the government got is that there is enough interest in the whole bundle [of airports], and will go forward with it,” this person said.

According to the International Air Transport Association, India’s aviation industry has doubled its size between 2010 and 2017, growing from 79 million to 158 million passengers. It is set to become the third largest air passenger market in the world by 2026.

The selected airports have all experienced double-digit growth rates in the last five years and are located in state capitals or densely-populated cities, turning them into attractive assets for investors, Jagannarayan Padmanabhan, director at CRISIL Infrastructure Advisory, told Infrastructure Investor in December.

Despite this, previous attempts to privatise Ahmedabad and Jaipur airports failed to attract interest from the private sector.