Mumbai: Kerala State Industrial Development Corporation Ltd (KSIDC), which has no prior experience in running airports and bid unsuccessfully for leasing the airport at Thiruvananthapuram, has sought court intervention to block Adani Enterprises from winning the right to run the airport located in the state capital, citing among other things, Adani’s lack of experience in airport operations.
KSIDC lost out to Adani Enterprises, which quoted the highest per passenger fee of Rs 168 in the auction to lease the airport for 50 years, while KSIDC came second with a quotation of Rs 135. The difference in the price bids was 19.7 per cent, denying KSIDC the opportunity to match the highest bid of Adani, who walked away with the deal.
Prior to the invitation of price bids, the Kerala government had wrested an assurance from the Central Government that if its quote came within 10 per cent of the highest bid, it would be allowed to match that rate and take the lease to run the airport.
Last week, the Kerala High Court declined to grant a stay on issuing a Letter of Award (LoA) to Adani Enterprises on a petition brought by KSIDC, but said the entire process would be subject to the final order of the court.
KSIDC has submitted before the court that AAI should desist from awarding the lease rights to Adani, arguing that it was “not comfortable” with the way the whole process was carried out by AAI in such a “hasty manner”, the time was very short (six days) to quote a price and Adani’s lack of experience.
“The Central Government had promised (at the time the Kerala government handed over land) that if there is any move to privatise the airport, the state would be consulted and we had demanded that the value given to the land should be converted into equity. It is in writing,” a Kerala government official claimed.
The court case has somewhat marred Adani’s spectacular show in the auction for leasing six airports, including Thiruvananthapuram, in which it made a clean sweep.
“I’m surprised by the legal arguments put forth by KSIDC on behalf of the Kerala government that Adani does not have prior experience in running airports. KSIDC also participated in the tender. What prior experience does KSIDC have in running airports; nothing,” a former director who ran four Airports Authority of India (AAI) airports told BusinessLine.
The stand of the Kerala government does not hold water because KSIDC, which was nominated by the state government to bid and has no prior experience in running airports, is arguing that Adani has no prior experience, he said.
According to rules framed by the Central Government in 2007, tenders for sector-specific infrastructure projects do not require firms to have prior experience in that sector in order to participate, but their eligibility is measured in terms of their experience score. The sum total of the experience scores for all eligible infrastructure projects undertaken would be the aggregate experience score of a particular applicant.
04/03/19 P Manoj/Business Line
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KSIDC lost out to Adani Enterprises, which quoted the highest per passenger fee of Rs 168 in the auction to lease the airport for 50 years, while KSIDC came second with a quotation of Rs 135. The difference in the price bids was 19.7 per cent, denying KSIDC the opportunity to match the highest bid of Adani, who walked away with the deal.
Prior to the invitation of price bids, the Kerala government had wrested an assurance from the Central Government that if its quote came within 10 per cent of the highest bid, it would be allowed to match that rate and take the lease to run the airport.
Last week, the Kerala High Court declined to grant a stay on issuing a Letter of Award (LoA) to Adani Enterprises on a petition brought by KSIDC, but said the entire process would be subject to the final order of the court.
KSIDC has submitted before the court that AAI should desist from awarding the lease rights to Adani, arguing that it was “not comfortable” with the way the whole process was carried out by AAI in such a “hasty manner”, the time was very short (six days) to quote a price and Adani’s lack of experience.
“The Central Government had promised (at the time the Kerala government handed over land) that if there is any move to privatise the airport, the state would be consulted and we had demanded that the value given to the land should be converted into equity. It is in writing,” a Kerala government official claimed.
The court case has somewhat marred Adani’s spectacular show in the auction for leasing six airports, including Thiruvananthapuram, in which it made a clean sweep.
“I’m surprised by the legal arguments put forth by KSIDC on behalf of the Kerala government that Adani does not have prior experience in running airports. KSIDC also participated in the tender. What prior experience does KSIDC have in running airports; nothing,” a former director who ran four Airports Authority of India (AAI) airports told BusinessLine.
The stand of the Kerala government does not hold water because KSIDC, which was nominated by the state government to bid and has no prior experience in running airports, is arguing that Adani has no prior experience, he said.
According to rules framed by the Central Government in 2007, tenders for sector-specific infrastructure projects do not require firms to have prior experience in that sector in order to participate, but their eligibility is measured in terms of their experience score. The sum total of the experience scores for all eligible infrastructure projects undertaken would be the aggregate experience score of a particular applicant.
04/03/19 P Manoj/Business Line
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