A petition, filed in the Karnataka High Court in February 2021, has challenged the Union government’s decision to hand over the Mangaluru airport to Adani Enterprises Ltd, stating that the privatization of airports is illegal, arbitrary and beyond the scope of the Airport Authority Act, 1994. The petition filed by the Airports Authority Employees Union at the Mangaluru airport has said that handing over the airport is not only “without authority of law but also has a larger impact on the public as well as a large number of employees.” The Karnataka High Court has reserved orders in this petition. TNM takes a look at the main points raised by the employees against the much touted acquisition.
In 2018, the Union government had announced an in-principle approval for leasing out six airports in India —Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram, and Mangaluru Airports through Public-Private Partnership (PPP). Adani Airport Holdings Limited (AAHL), a wholly-owned subsidiary of Adani Enterprises Ltd, was the highest bidder, the Union government announced later. AAHL formally took over control and management of the Mangaluru airport in 2020.
The petition said that at the outset itself, there was no proper examination of the proposal by the Union government, and contrary to the international standards, as well as the normal bidding process, there was no base price fixed. Thus, the bid was beyond the analysis of profit and loss calculations, the plea says.
Another major opposition raised by the airport employees union is that under Section 12A of the Airports Authority of India Act, 1994, only certain functions of the airport can be leased out.
“Under Section12-A of the Act, only certain functions of the Airport can be Leased Out and the concession agreement, as in this case, is much beyond the scope of the provisions of the Act,” the plea says.
“It is only the premises of the Airport which are necessary for doing the activities and for incidental services such as management of hotels, restaurants, postal services that can be leased out and not the entire airport itself. Therefore, Section 12 does not contemplate handing over the entire Airport in the name of the lease and assigning all its functions to a private entity. Any other type of parting with the property of the Authority is not contemplated under the Act,” the plea says.
The petition has alleged that everything at the airport has been leased out. LiveLaw reports that on behalf of the petitioners, the counsel argued before the High Court that runways, taxiways, aircraft rescue, fire buildings — which are part of the air traffic service — have also been leased out, which is in violation of the Airports Authority Act. “They could not have been leased at all. Virtually, the control over aviation services is given to them, it is contrary to AAI Act,” advocate Ashok Haranahalli said before the Karnataka High Court.
Section 12(1) of the Act states, “It shall be the duty of the Authority to provide air traffic service and air transport service at any airport and civil enclaves.” The Act also states that some functions at the airport can be leased out only if it does not affect the functions of the Authority under section 12, which relates to air traffic service or watch and ward at airports and civil enclaves.
Moreover, the petition adds that the private entity will have the power to hike non-traffic charges such as X-ray screening charges, passenger service fee, duty-free shop charges and other fees for arranging facilities at the airport — the burden of which will fall directly on the passengers.
The plea also contends that AAI’s revenue will be reduced by 50% after privatisation. The plea also accuses the AAI of not carrying out any scientific study for analyzing the impact of PPP-model privatisation, “giving room for Corporates to generate windfall profit from the existing financially viable project.”
“The entire bidding process is without authority of law and tainted by high levels of irregularities in the bidding process,” the plea adds.
The plea has asked the Karnataka High Court to declare that the entire bidding process as “illegal and without authority of law,” as far as Mangaluru airport is concerned. It states that none of the provisions of the Airports Authority of India Act permit parting with the property with the private sector.
“The decision of the Respondents (Union government and AAI) to part with the property and the activities in the name of lease is nothing but a colorable exercise of power. It is a well-settled law that what cannot be done directly cannot be done indirectly. Therefore, the impugned action of the Respondents is illegal and in violation of the provisions of the Act,” the plea says.
The plea added that the privatisation of the six airports without any authority and without ensuring the corresponding participation of the Government, will cause huge loss to the revenue starved public exchequer. “It will amount to handing over land and buildings worth several crores, for throw-away prices to private persons, which will be against the interest of the nation as such,” the plea said.
This is not the first plea against the privatization of airports in India. Last year, the Kerala government had moved the Kerala High Court against the taking over of the Thiruvananthapuram airport by the Adani group. But the Kerala High Court dismissed all petitions challenging the Union government’s decision to hand over the airport to the Adani group. The Kerala government then approached the Supreme Court against the move and the case is still being heard.
(Image courtesy: Wikimedia.commons/Premnath Kudva, wikimedia.commons/Gautam Adani)