The government on Tuesday proposed a new transaction structure for the bid process for greenfield airports, switching from a revenue share model to a fixed fee per passenger to be paid to the concessioning authority. The Ministry for Civil Aviation is betting that the proposed change to the bid parameters would help ensure affordability of airport services for passengers as well as predictability of revenue for the winning bidder.
The Ministry has also proposed that tariff regulator Airports Economic Regulatory Authority of India may formulate key performance indicators as part of the bid document and could be revised every five years. This would ensure quality of services by the concessionaire. The Ministry has invited comments on its proposal until September 14, which would be incorporated in a model concession agreement for airports.