New Delhi: The Union Cabinet on Wednesday approved the proposal for leasing out airports at Thiruvananthapuram, Jaipur and Guwahati and through public-private partnership(PPP).
Adani Enterprises had won the rights to run six airports – Thiruvananthapuram, Lucknow,Ahmedabad, Jaipur, Mangaluru, and Guwahati -- through PPP model after a competitive bidding process in February 2019.
These six airports are owned by the Airports Authority of India (AAI).
Adani Enterprises had signed the concessionaire agreement with AAI for three airports - Ahmedabad,Mangaluru and Lucknow - on February 14, 2020.
At a press conference on Wednesday, Union Environment Minister Prakash Javadekar said the cabinet has approved the proposal for leasing out Jaipur, Guwahati,Thiruvananthapuram airports through PPP model.
Kerala vs Centre
The move to lease out the Trivandrum International Airport came after a prolonged tug-of-war between the Kerala and Central governments.
The Centre had accorded 'in principle' the approval for leasing six airports of theAirport Authority of India (AAI) through a public-private partnership model in 2018. These include Ahmedabad, Jaipur, Lucknow, Guwahati, Mangalore and Thiruvananthapuram airports for operation, management and development.
Adani Group had bid for all six and won four – Ahmedabad, Lucknow, Mangaluru, andJaipur.
The Adani Group had edged Kerala State Industrial Development Corporation (KSIDC)and the GMR Group (the operator of Delhi and Hyderabad airports) to gain the operational control of the Thiruvananthapuram International Airport in 2019.
Though the Kerala government itself was against the idea of handing over the operation of the airport to private companies, it later participated in the bid through the public sector entity KSIDC.
A special purpose vehicle under KSIDC called TIAL (Trivandrum International Airport Limited) was formed to take part in the bid and the state government had sought the right of first refusal. However, a bid difference of only 10 per cent was granted in TIAL's favour.
This meant that TIAL would get preference if the winning bid is only 10 percent higher. Adani quoted an amount nearly 25 percent higher than TIAL's. If Adani's quoted fee was Rs 168 per passenger, TIAL's was Rs 135.
The Kerala government had moved the High Court challenging AAI's "arbitrary and illegal" attempt to prefer a private entity for the management of Thiruvananthapuram International Airport.
In a writ petition on March 5,2019, the state government stated that AAI's attempt to grant Adani Enterprises the rights was not in public interest. It was also "violative"of the provisions of the AAI Act as well as the proprietary rights of the state government as regards to the land wherein the airport was situated, it added.
The airport, established in 1932, was built on 258.06 acres of land owned by the princely state of Travancore. This 258.06 acres of land has been entered in revenue records as government land.
That's not all, the state government, having expertise in airport management and also creditworthiness more than that of the private entity (which does not possess the previous experience in airport management) should ideally be preferred in public interest. KSIDC's (TIAL) bid was a fairly competitive one.
Kerala Chief Minister Pinarayi Vijayan had also wrote to Prime Minister Narendra Modi urging him not to hand over the international airport to a private entity.In his missive, Pinarayi Vijayan had said that the growing "public resentment" would make it difficult for the state to back a "private agency".
The chief minister had also called the entire bidding process into question. He reiterated the sentiment in the Kerala Assembly, too. “The absence of a prior experience clause in the tender document was surprising. Instead an experience in infrastructure development alone was asked for. That the Adani Group, which had no experience in airport development, had won six bids makes the entire process suspicious,” the chief minister said in the Assembly in March, 2019.
Kerala govt, opposition slams move
The Kerala government and the opposition Congress on Wednesday expressed strong reservations over the Centre's nod to lease out Thiruvananthapuram international airport to Adani Enterprises and demanded that the decision be revoked.
The decision to lease out the airport under the PPP model for 50 years comes at a time when a petition against it is pending in the Kerala High Court.
Tourism Minister Kadakampally Surendran slammed the Centre and asked the state BJP unit to explain the development.
"This is one of the biggest scams to hand over the country's first international airport in independent India to a private party. This is a big corrupt deal and all of us here will oppose it tooth and nail. Spread over 657 acres of prime land acquired over many years, this airport makes a profit of Rs 170 crore in a year but has been handed over to Adani Group for a pittance," Surendran said.
"It must be noted that this leasing comes at a time when the Airports Authority of India is investing Rs 600 crore for a new runway and the acquisition process for another 18 acres is underway. The lone Keralite in the Union Cabinet, V Muraleedharan, and other BJP leaders here should explain why this corrupt deal is taking place. We will seek legal recourse also," the Minister added.
"Our government presently runs the airports at Cochin and Kannur and is well-versed in the operations. We even went to the extent of matching the figure quoted by the Adani company, but it was not accepted. We will continue to raise the issue and we will not give up," Surendran asserted.
Leader of Opposition and Congress leader Ramesh Chennithala demanded that the Centre reconsider its decision.
"This airport is the wealth of Kerala. The Centre is doing all sorts of things when the COVID-19 pandemic is peaking. The state government had appealed that it was willing to take over the airport, but the Centre ignored it. We register our strong protest over this deal," said Chennithala.
With the commissioning of the Kannur airport, Kerala became the first in the country to have four international airports, with Thiruvananthapuram, Kochi and Kozhikode being the other three. Kannur airport was the second in the state to be built under PPP route after the Cochin International Airport (CIAL).