The Adani Enterprises Ltd, has won the bid to manage and operate the Thiruvananthapuram International Airport after it quoted the highest price among all financial bids. Adani group in fact bid higher than the Kerala State Industrial Development Corporation (KSIDC) which came second and the GMR group which came third. The official announcement regarding this will be made only on February 28.
Along with the Trivandrum International Airport, the Adani group also managed to win bids to upgrade and operate 4 other airports including Lucknow, Jaipur, Ahmedabad and Mangalore which were put out for bids by the Airport Authority of India (AAI). The contract to operate these airports is for a period of 50 years.
The bid parameter for the Operation, Management and Development of Six AAI Airports under Public Private Partnership (PPP) of the five airports is Rupees Per Passenger payable to AAI.
Of the bids received for the Thiruvananthapuram airport, Adani was Rs 168 per passenger, while KSIDC’s bid was at Rs 135. GMR Airports has also bid for the airport at Rs 63 per passenger.
For the Mangaluru airport as well, Adani outbid GMR and Cochin International Airport, offering Rs 115 per passenger. GMR’s bid was at Rs 18 and Cochin International Airport’s at Rs 45 per passenger.
The Kerala Government was initially against the Central Government’s decision to hand over the international airport to private companies but later decided to participate in the bid to retain the airport under the ownership of the Cochin International Airport Limited (CIAL). The state government then hastily formed a separate company known as the Trivandrum International Airport Limited (TIAL) to bid for operating the international airport. But the company took part in the bidding under the name of KSIDC.
TIAL was formed in the PPP (public private partnership) model, the same way in which the companies are running Cochin and Kannur International airports.
According to reports, the Kerala government had sought the Centre for an FRR or First Right of Refusal, which is a contractual agreement that allows the state to enter into a business transaction. The Kerala Government was allowed a 10 percentage FRR, which means that even if the other companies bidded higher, KSIDC had the privilege to bid 10 percent higher, but the amount that was bid by Adani group was way higher than 10 percentage because of which KSIDC has reportedly lost the tender.
By winning these bids, the Adani group has marked their big entry into the aviation business as well.