Elamaram Kareem, a Rajya Sabha MP of the CPI(M) has now questioned how Adani Enterprises was given the contract for the operations of six airports, and has urged Central Vigilance Commissioner (CVC) Sanjay Kothari to conduct an enquiry. He urged the CVC to look into whether there were irregularities in the bidding process and to check whether there were any vested interests in the operations being handed over to Adani.
Adani Enterprises has won bids to operate and manage six airports — Thiruvananthapuram, Jaipur, Guwahati, Mangaluru, Lucknow and Ahmedabad. Adani has signed a Concession Agreement (CA) with three of the six airports to operate, manage and develop them for a period of 50 years. It then went on to acquire a majority stake in the Mumbai International Airport Limited (and the upcoming Navi Mumbai International Airport), making it India’s largest private airport operator.
Adani has met with major opposition from the Kerala government regarding the bid being granted to them.
In his letter to Kothari, Kareem says, “It's evident from the relevant records that there was gross negligence on the part of Airports Authority of India and Ministry of Civil Aviation while preparing the Public Private Partnership Appraisal Committee (PPPAC) memo and other related records, paving way to the privilege player - Adani Enterprises, to earn windfall profit from the vast assets and business of Airport Authority of India spreading across six states.”
Kareem says that it is evident prima facie that the AAI or the Ministry of Civil Aviation did not exercise “any reasonable care and prudence, which it usually follows, while placing even comparatively low-value tenders.”
The letter adds that all functional airports are now decided to be leased out to Adani even after protests from various sections of protests.
“The irregularities in the bidding process should be checked thoroughly and it should be made clear to the public whether there were any vested interests to hand over the operation of all three airports to the same private bidder,” the letter reads.
The allegations made by him include —
> The absence of a Minimum Reserve Price for the per passenger fee
> That the Project Report Submitted to PPPAC was inconclusive and the projects had not been properly envisaged, studied and presented by AAI
> That there was “undue urgency” on the part of the Ministry of Civil Aviation to complete the transaction before February 2019, rather than trying for getting a right price
> The request for qualification was neither prepared nor circulated
> That there was no Operation and Management Experience Clause
> That the Empowered Group of Secretaries constituted by the Cabinet had interfered into the affairs of PPPAC, “though they were not legally entitled to do so”
> That handing over the airports for 50 years is a violation of the Airports Authority of India Act, which caps it at 30 years
> Airport revenues comprise Aeronautical Revenue and Non-Aeronautical Revenue. In his letter, he alleged that since the six airports are in the heart of the city, the scope of earning non-aeronautical revenue is more and since such income is out of purview of Per passenger revenue model, it gives Adani the opportunity to earn windfall revenue without any obligation to share the revenue with AAI. While the Department of Expenditure and a member of the PPPAC suggested a cap of 5% for city side development, the PPPAC decided to offer entire available land for the same.
The letter further states that vital financial parameters in the bid document including the total project cost, minimum bid value etc., were kept open, which in turn gave a free hand to the private player (Adani) to shape the contract in its fashion.
Allegations on the anomalies in leasing out six airports of the country through a Public Private Partnership (PPP) to Adani Enterprises were also raised by the Airports Authority Employees’ Union, an independent union of AAI.
The union alleged that the Request for Proposal, which is the document that provides details of the project while inviting bids, was vague and lacked transparency. The selection process too, they alleged, was kept vague and this information was also denied to the union when requested through an RTI.
They also questioned why the entire process was done in such haste, skipping several steps that the bidding process for a PPP involves.
An RTI filed by the union in February 2019, reveals that there was no study conducted to ascertain the existing per passenger fee of these six airports and as a result, no minimum per passenger fee was fixed to ensure there isn’t a loss to revenues.