Companies Gujarat Karnataka Kerala

Adani airport acquisitions resulted in alarming accusations by AAI Unions

In 2018, six airports were chosen for privatisation by the Airports Authority of India (AAI) by leasing them out. 

The Adani Group won the bid for all six airports in February 2019. 

The Airport Authority Employees Union (AAEU) has alleged that for  the amount that the Adani Group paid for the airports assets as per the final agreement is far less than what the Airports Authority of India’s bidding document states. 

Since then, controversy happened  handover of these airports was delayed because Adani sought an extension due to the pandemic. 

However as on date Adani Enterprises has already taken over these three airports inclusive of  Mangaluru, Lucknow and Ahmedabad

And the company is likely to take over  other tow airports viz Thiruvananthapuram and Jaipur airports this month, as well. 

The privatisation is where the Adani Group has a lease for the airports for a period of 50 years. 

The union has also earlier alleged that the lease period of 50 years is in contravention of the Airports Authority of India Act, which recognises leasing for a period of 30 years.

Therefore In its letter to the PM, the Airport Authority Employees Union has asked that the handover of airports be halted till there is a review, and has proposed a high-level judicial inquiry.  

The AAEU has alleged in a letter to the Prime Minister that while the bidding document says the final bidder should have to pay  Rs 1,330 crore towards AAI’s existing assets before take over.

But As per the final agreement however, Adani had to pay only  Rs 499.84 crore for the lease in the end. 

The value of Rs 1,330 crore for the assets was pegged at the time when the Civil Aviation Ministry sought the approval of the Public Private Partnership Appraisal Committee (PPPAC). 

It is to be noted PPPAC is the Union government’s committee that looks into and approves Public Private Partnership projects.

The concessionaire agreement signed between Adani Enterprises and the Airports Authority showed, according to the union, that the amount that Adani reimbursed towards existing assets of the airport were at a fraction of the initial price.

As per the letter, the bidding document said that the amount to be paid towards assets were Rs 363 crore for Mangaluru airport, Rs 583 crore for Lucknow and Rs 384 crore for Ahmedabad. 

As per the final agreement, however, Adani had to pay Rs 74.5 crore for Mangaluru (a reduction of Rs 288.5 crore), Rs 147.93 crore for Lucknow (down by Rs 435.07 crore) and Rs 277.41 crore for Ahmedabad (down by Rs 106.59 crore).

The letter alleged that undue advantage was given to Adani and that almost all project parameters including the project’s scope, project cost, Minimum Reserve Price, Fair value of Existing assets etc “were neither ascertained nor published in bid documents”.

This is not the first time that the allegations regarding the bidding process have been raised. 

In 2020 media reported that there were alleged anomalies in the bidding process and how the Adani Group won the bid. 

“The process of approving the project report for Adani was done in a hasty manner to favour only one bidder,” an office bearer of the AAEU had told media, 

Concerns that were flagged before Adani won the bid, include that an organisation that lacked technical expertise winning the bids. 

As per documents, while the Department of Economic Affairs had flagged this, the Empowered Group of Secretaries (EGoS) constituted by the Cabinet decided that no restriction needed to be placed.

The union had also earlier challenged the bidding process, for all six airports that were privatised, in the Kerala High Court. 

This was dismissed by the court in October 2020. As per the union’s letter, a special leave petition in this regard is still pending in the Supreme Court. 

The union had also approached the Karnataka High Court, but the Public Interest Litigation (PIL) challenging the privatisation of Mangalore International Airport was rejected last month.

In its letter, the union  demanded directions be given to the civil aviation minister and the Airports Authority to halt the handover of airports till the time there is a review, and has proposed a high-level judicial inquiry.

“The Inquiry should cover the entire Bidding process and Misrepresentation made by Concerned Officials before the Hon’ble High Court of Kerala,” it states. 

It is important to note Adani Group told The Hindu, “As per bid documents given to all bidders, the Concessionaire was required to pay the amount of investments made by AAI as on 31.3.2018, which was predefined in the respective Concession Agreement.”

Splco Reporter
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