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 1. News
 2. Political Pulse
 3. Rewind: How Finance, Niti Aayog had flagged objections before Adanis bid,
    six airport wins

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 * Also read in:
 * বাংলা
 * ગુજરાતી


REWIND: HOW FINANCE, NITI AAYOG HAD FLAGGED OBJECTIONS BEFORE ADANIS BID, SIX
AIRPORT WINS


A YEAR AFTER IT WON THE BIDS FOR THE SIX AIRPORTS, THE ADANI GROUP SIGNED
CONCESSION AGREEMENTS FOR AHMEDABAD, MANGALURU AND LUCKNOW AIRPORTS IN FEBRUARY
2020.

By: ENS Economic Bureau
New Delhi | Updated: February 8, 2023 10:43 IST

 * 
 * 
 * 
 * 


From running a private air-strip at Mundra, the Adani Group’s transformation
into the country’s largest private developer in terms of number of airports
handled and the second largest, in terms of passenger traffic, happened over
less than 24 months. (Express photo by Nirmal Harindran)
Listen to this article
Rewind: How Finance, Niti Aayog had flagged objections before Adanis bid, six
airport wins
x
00:00
1x 1.5x 1.8x

Rahul Gandhi’s attack in Parliament on the Adani Group’s aviation foray was
centred on what he called tweaks in rules to allegedly facilitate the
Ahmedabad-based Group’s entry into the sector and allegations of coercion by
investigating agencies to force out the operator of the Mumbai airport before it
was handed over to the Adanis.

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From running a private air-strip at Mundra, the Adani Group’s transformation
into the country’s largest private developer in terms of number of airports
handled and the second largest, in terms of passenger traffic, happened over
less than 24 months.

Also in Political Pulse |Rahul Gandhi flags, questions Adani’s rise under Modi,
Govt hits back: baseless, show proof

The Group’s entry into the airports sector came about even as the Union Finance
Ministry and the Niti Aayog put on record objections regarding the 2019 airport
bidding process that were subsequently overruled, clearing the way for a clean
sweep of six airports on offer by the Adani Group.



Before bids were invited for the privatisation of the airports at Ahmedabad,
Lucknow, Mangalore, Jaipur, Guwahati and Thiruvananthapuram, the Centre’s Public
Private Partnership Appraisal Committee (PPPAC) had discussed the Civil Aviation
Ministry’s proposal for the process on December 11, 2018.

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During these discussions, a note from the Department of Economic Affairs,
according to the minutes of the meeting, said: “These six airports projects are
highly capital-intensive projects, hence it is suggested to incorporate the
clause that not more than two airports will be awarded to the same bidder duly
factoring the high financial risk and performance issues. Awarding them to
different companies would also facilitate yardstick competition.” The DEA’s
note, dated December 10, 2018, to the PPPAC was submitted by a director in the
department’s PPP cell.

Must Read |BJP says look who’s talking: Rahul, his family out on bail, scams
from land to coal to 2G

To buttress its argument, the DEA cited the precedent of the Delhi and Mumbai
airports, where GMR, despite being the only qualified bidder originally, was not
given both the airports. It also referred to the privatisation of Delhi’s power
distribution, where the city was carved out into three zones and given to two
separate companies. At the PPPAC meeting, according to the minutes, there was no
discussion on this red flag raised by the DEA.

On the same day as the DEA note, NITI Aayog raised a separate concern regarding
the airport bidding. Said a memo prepared by the PPP vertical of the
government’s key policy think-tank: “A bidder lacking sufficient technical
capacity can well jeopardise the project and compromise the quality of services
that the government is committed to provide”.

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Explained |What is Hindenburg Research, the company that has accused Adani Group
of stock manipulation, fraud?

In response to this, the PPPAC, chaired by the then DEA Secretary, noted that
the EGoS (empowered group of secretaries) had already decided that “Prior
airport experience may neither be made a prerequisite for bidding, nor a
post-bid requirement. This will enlarge the competition for brownfield airports,
which are already functional”.

During the bidding process for the six AAI-run airports, the Adani Group outbid
its rivals, including experienced players such as GMR Group, Zurich Airport and
Cochin International Airport Ltd in addition to other infrastructure players, by
a big margin in each of the six bids, thereby winning the rights to operate all
six airports for a period of 50 years. This was a departure from the
privatisation of Delhi and Mumbai airports, where the concession period was 30
years, in addition to the AAI holding 26% equity in both these airports.

A year after it won the bids for the six airports, the Adani Group signed
concession agreements for Ahmedabad, Mangaluru and Lucknow airports in February
2020.

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Also Read |Five things Rahul Gandhi said in Parliament about Adani Group

Then in March 2020, the Group invoked a Covid19-linked force majeure to seek a
delay until February 2021 in taking over the three airports from AAI, citing
difficulties in the transitioning processes, particularly with regard to the
airport staff.

The AAI had asked the Group to take over the three airports by November 2020.
Three of these six airports — Ahmedabad, Mangaluru and Lucknow — were
consequently handed over to the Adani Group in November 2020. The concession
agreement for the other three airports — Jaipur, Guwahati and Thiruvananthapuram
— were signed between AAI and Adani Group in September 2020.

Just under six months after it sought more time from AAI citing the Covid-19
pandemic, the Adani Group went on to acquire a controlling interest in the
country’s second largest airport in Mumbai and the upcoming Greenfield airport
in Navi Mumbai from the GVK Group.

In the months before the Adani Group’s takeover of the Mumbai airport, the GVK
Group had signed an agreement with investors, including India’s sovereign fund
(the NIIF), in October 2019, trying to fend off the Adanis. But in less than a
year, on August 31, 2020, the GVK Group signed an agreement to let Adani
Enterprises acquire its stake in Mumbai airport and Navi Mumbai airport.

Incidentally, a month before it decided to throw in the towel, the GVK Group had
to face the heat from multiple investigative agencies, with the Enforcement
Directorate (ED) conducting searches at the offices of GVK Group and the
residences of its promoters in Mumbai and Hyderabad, in connection with a money
laundering case for alleged irregularities in the development of Mumbai
international airport.


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On July 7, 2020, the ED had registered a complaint under Section 3 of the
Prevention of Money Laundering Act (PMLA) against the GVK Group and its chairman
GVK Reddy, his son GV Sanjay Reddy and a few others, based on an FIR filed by
CBI against them on June 27. The CBI had also alleged irregularities in the
development of Mumbai international airport.

© The Indian Express (P) Ltd

First published on: 07-02-2023 at 21:57 IST
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