The civil aviation ministry has said that a report published by the Indian Express on 15th January alleging irregularities in Adani group winning bid for running 6 airports is factually incorrect and false. The minister has denied allegations made in the report that there were objections to one company winning all six bids, saying that the entire process was conducted in a transparent manner.
In the report published on 15th January, the Indian Express had alleged that the Finance Ministry and Niti Aayog had put on record objections regarding the 2019 airport bidding process, but those objections were over-ruled and Ahmedabad-based Adani group had made a clean sweep by winning the bidding for all six airports: Ahmedabad, Mangalore, Lucknow, Jaipur, Guwahati and Thiruvananthapuram.
The report claimed that during the bidding process, the Department of Economic Affairs has proposed to incorporate a clause to prevent a single bidder to win more than two airports. Quoting minutes of meeting that Indian Express has claimed to have accessed, the report said that the department had suggested this as the six airport projects are highly capital-intensive projects, and awarding them to different companies will facilitate yardstick competition.
The report said that NITI Aayog also raised a different concern regarding the matter, saying that a bidder without sufficient technical capacity can jeopardise the project and compromise the quality of services that the government is committed to provide. The report also notes that earlier when Delhi and Mumbai airport operations were privatised, GMR was not awarded both the airports despite emerging as winner in the bids for both the airports.
Responding to the report published a week ago, the civil aviation ministry has released a statement today dismissing all the allegations made in the report. It says that the report is factually incorrect as the bidding process was conducted in a competitive and transparent manner through e-tendering portal of the Government of India, in which 25 firms across the globe had registered and total 86 registration were received in the portal for 6 airports.
“Out of these registrations, 32 bids were received from 10 difference entities for 6 airports. As the bid process was completed transparently, none of the participating entity raised any concern or objection to the bidding process,” the ministry statement said.
The ministry informed that the bid parameter stipulated in the tender document was ‘per passenger fee’ quoted by the bidder and the entity whose bid is highest in terms of per passenger fee quoted would be declared as successful bidder. As the bid for Adani Enterprises Limited was highest in all the six airports, they group had won all six bids. The tender process of each airport was undertaken on individual basis, and the bid for the same bidder was found highest in all the six airports, therefore the same company won all six airports, the statement said.
The ministry has also said that the claim that the Finance Ministry and the NITI Aayog had raised objections to the process is incorrect, as an Empowered Group of Secretaries (EGOS) Chaired by CEO NitiAayog with Secretaries of Ministry of Finance (Department of Economic Affairs, and Department of Expenditure), and Civil Aviation as Members was given the powers by the Union Cabinet to decide on the matters outside the purview of Public Private Partnership Appraisal Committee (PPPAC). Accordingly, the terms and conditions of the transaction of the PPP were deliberated and decided by the EGoS in its meeting held on 17.11.2018 which were agreed by the PPPAC in its meeting held on 11.12.2018.
Responding to the earlier example of putting restrictions in bidding for Delhi and Mumbai airports, the ministry said that the Empowered Group of Secretaries took a conscious decision not to put any restrictions on the number of airports to be bid for or to be awarded to a single entity considering the fact that these 6 airports are smaller in size and handling only 9.5% of the passenger traffic, whereas Delhi and Mumbai airports accounted for more than 45% of the total passenger traffic in 2006 when they were brought under PPP and the decision to cap one airport to single bidder was necessary.
The ministry also says that the quantum of passengers handled by the private airport operators is more crucial and important than the number of airports handled by a single entity. The statement also informed that EGOS decided not to stipulate prior airport experience as a mandatory qualification to increase competition and avoid monopoly by those players having Airport experience, who would have an edge over others.
Moreover, both the EGoS and PPPAC comprises members from Ministry of Finance (Department of Economic Affairs & Department of Expenditure), NITI Aayog and the Civil Aviation ministry. Therefore, both the finance ministry and NITI Aayog were involved in finalising the contours of the bidding process. “Therefore the statement that the views of Ministry of Finance and NitiAayog were ignored is factually incorrect and based on assumption”, the ministry said, informing that views of both the entities are part of the established procedure.
The ministry statement also pointed out a factual error in the report which says that concession agreements for Guwahati, Jaipur and Thiruvananthapuram airports were signed by AAI in September, whereas, it has actually been signed on 19.01.2021.
It was also pointed out by the civil aviation ministry that the same allegations made in the Indian Express report were made in various petitions submitted with Kerala High Court opposing the PPP mode of operation of AAI airports, which were dismissed by the court.
