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Effectiveness of public private partnership model in India: a study with special reference to the airport sector

Student name: Mr Vaibhav Kumar Jha
Guide: Dr Jaya Vasudevan
Year of completion: 2020

Abstract:

The term privatization took its place in Indian economy, after the wave of liberalization came in 1990s. This new economic reform, open the door for trade, investment, commercial banking, industrial and infrastructure activity in public sector works with the help of private participation. Thus, airline industry is one of the infrastructure industries, which has been privatized in respect of airline activity and airport infrastructure development sector. Thus, before 1991, there were a very few privately owned airlines industries but there was no privately owned or operated airport in India. Thus, to have world class airport infrastructure, government introduced “first phase of airports privatization” under the new policy reform in 1997s, which initiated private firms or entities involvement in developing the airport infrastructure under the umbrella of “Public Private Partnership”. Thus, under the first phase, government privatized “Delhi, Mumbai, Bangalore and Hyderabad” airports through PPPs arrangement. In this background, the present research focuses on the PPPs based airport projects in India, which come under the collaboration between “Airport Authority of India” and “Public Private Participation” with a stake holding of 26 & 74 percentage. Thus, this research also reflects issues or challenges that are being faced in existing four PPPs basis airport projects, which anyhow guide in constructing effective PPPs arrangement between AAI & Private Player, in the second phase of airport privatisation in in “Lucknow, Ahmedabad, Jaipur, Mangalore, Thiruvananthapuram and Guwahati” as upcoming six airports projects under PPPs model in India. Thus, in the past two decades airport privatisation have been solving number of problems in respect of finances, infrastructure and employment while on the other hand, privatisation equally created threat in “Indian Civil Aviation Industry”, while providing excess control to private player to own the project for just longer concession period, which led to many unfair or illegal practices in respect to construction, maintenance and operation at ground level. Thus, to overcome with these issues & challenges, PPPs arrangement must be unbiased, fairer & transparent, which constituted certain regulatory bodies performing the task of check or balance in the privatisation of an airport sector.

Keywords: Privatisation, Infrastructure, Airport, Policy.