Govt. nod for leasing out 3 airports to Adani

The government on Wednesday approved leasing out of three State-owned airports — Ahmedabad, Lucknow and Mangaluru — to Adani Enterprises Limited through a public- private partnership.

In February, Adani Enterprises emerged as the winning bidder for six airports bid out by the Airports Authority of India. With the Union Cabinet approving leasing of only three of them, uncertainty hangs over the Guwahati, Thiruvananthapuram and Jaipur airports.

It is learnt that the Ministry of Civil Aviation had sent a proposal for all the six airports to the Cabinet. The bids expire on July 30, though a senior AAI official said their validity could be extended.

Following the Cabinet’s nod, the AAI is expected to issue a Letter of Intent for each of the three airports to the Adani Enterprises after which a joint measurement of land and assets will be carried out.

The other three airports are embroiled in controversy. In March, the Kerala government filed a writ petition in the High Court challenging AAI’s proposal to award the Thiruvananthapuram airport to Adani Enterprises instead of the Kerala State Industrial Development Corporation Ltd (KSIDC), as the State government had contributed to the acquisition of land for the airport. Similarly, a group of prominent citizens dragged the AAI to the Guahati High Court in February opposing its decision to privatise the Lokpriya Gopinath Bordoloi international airport in Guwahati.

The Congress-led government in Rajasthan, too, has objected to the Jaipur airport being awarded to Adani on the grounds that the State government was not consulted during the bidding process.AAI’s Bid:
AAI had sought bids for the operation and management of six existing airport assets as well as their upgradation and development of additional air-side terminals, city-side and land-side infrastructure for 50 years. AAI chose the winner by the highest per-passenger fee that the concessionaire will pay to the AAI monthly on a 50-year contract.
Through this project AAI will earn Rs.525-575 crore per year based on the rate quoted by Adani Enterprises. This will increase based on traffic growth. Also, the rate for international passengers will be twice the rate quoted for domestic passengers.

Reason for the project:
The projects are expected to bring efficiency in delivery, expertise, enterprise and professionalism apart from harnessing the much needed investments in the public sector. It will enhance revenues for AAI. It may lead to further investment by AAI in Tier-II and Tier-III cities and economic development in these areas in terms of job creation and related infrastructure.

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