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Adani’s airport privatisation plan put on hold

Just two weeks after outbidding a slew of national and international competitors to win bids to privatise, upgrade and operate all six airports up for grabs; the Gautam Adani led Adani Enterprises will have to wait at least till the Lok sabha elections are over to begin its quest to become India’s largest private airport operator.

Mounting aggressive bids, far greater than its competitors, including India’s biggest private sector airport operator, the GMR Group; the Ahmedabad based Adani Enterprises offered the highest payment for “per passenger fee” to Airports Authority of India (AAI) for Ahmedabad, Jaipur, Lucknow, Thiruvananthapuram, Manglore and Guwahati  Airports and will get to manage them for 50 years. However, a Cabinet clearance was needed for completion of this formality before finally awarding the contract to the ports-to-power behemoth.

What raised eyebrows though was the hasty manner in which the government had gone ahead with the development of the six airports. With no prior experience in running airports, and with Guwahati and Ahmedabad being positioned as the next gateways for flying; people in know began to question as to how sensible was the decision to not include previous experience as a criteria for bidding?

When GMR and GVK were given rights to operate Delhi and Mumbai airports, they had to partner up with Frankfurt Airport and South African Airport respectively before they bid as a precondition.

Further, given the fact that the total traffic at these six airports, including international traffic, stood at 30 million passengers in F.Y. 2018, a jump of 22% from the previous year; suspicions of Adani’s closeness to the ruling party and crony capitalism began to surface.

Perhaps keeping this in mind, according to a government official, the Narendra Modi government has decided not to take the Cabinet Proposal for awarding the six airport privitisation projects won by the Adani Group last month. As such large contracts had become a subject of political controversy in the past, the decision to defer handing over the projects may have been prompted by the government’s intention to avoid a political controversy before the general elections. The opposition Congress has already attacked the government on the purchase of Rafale Fighter Jets under a deal with the French government, making it a poll issue.

Another aspect could be the fact that running an airline and an airport are specialised businesses, and in the wake of the recent Pulwama attacks, the last thing the government wants is questions being raised about professional and security standards.

 

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