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Adani Group Awarded 6 Airport Bids Despite Red Flags By Finance Ministery and NITI Aayog: Report

As of now, the Adani group has the right to operate 6 airports for 50 years including Ahmedabad, Lucknow, Mangalore, Jaipur, Guwahati, Thiruvananthapuram airports.

 

The Adani Group has also acquired the Mumbai Airport- the second-largest airport in the country. The airport authority has given a go-ahead for its takeover on 12 January. So far, the Ahmedabad-based Adani Group has made the largest bid for 6 airports. However, a report published in the Indian Express says that the NITI Aayog and Finance Ministry had objected to the bidding process in the year 2019. According to the report, both the FinMin and NITI Aayog had raised a red flag over awarding the bid of 6 airports to the same bidder but it was ignored.

The report reveals that bids were invited for Ahmedabad, Lucknow, Mangalore, Jaipur, Guwahati, Thiruvananthapuram airports under the NDA government’s largest privatization program. The proposal was discussed by the Centre’s Public-Private Partnership Appraisal Committee (PPPAC) on 11 December 2018.

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As per the report, the minutes of the meeting show that the Department of Economic Affairs in a file noting had cautioned over the deal. It said that these 6 airports are highly capital intensive and had objected to giving them to the same company.  It also suggested to include the clause of not awarding more than two airports to the same bidder considering the high financial risk and performance issues. It further in the noting had said that awarding bids to different companies would also facilitate yardstick competition.

In this case, the finance ministry had also approached the president of Delhi and Mumbai airports. Here GMR was the only qualified bidder but both the airports were not given to it. On the same day, the NITI Aayog also expressed a different concern on the finance ministry’s note. The NITI Aayog said that the PPPAC memo was against the government’s policy. The bidder who does not have the technical capability will not be able to provide services as per the commitment of the government, the report quoted excerpts from the note.

In reply, the PPAC headed by SC Garg, then Secretary, Ministry of Finance, said that it has already been decided that earlier experiences will not be made the basis of bidding. A year after winning the bid, the Adani Group signed a concession agreement for Ahmedabad, Mangalore and Lucknow airports. In terms of bidding, the Adani Group outperformed the GMR Group, Zurik Airport and Kochi International Airport Limited. As of now, the Adani group has the right to operate 6 airports for 50 years.

The Adani Group is today the largest private developer in the country which owns many airports. In the last financial year, 7.90 crore passengers travelled from Ahmedabad, Mangalore, Lucknow, Jaipur, Guwahati, Thiruvananthapuram and Mumbai airports out of total 34.10 crores domestic passenger traffic In India.

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