Friday, August 21, 2020

After Kerala red flags airport privatisation plan, Civil Aviation minister says state bid failed to qualify

A day after the Union Cabinet cleared leasing out of three airports — Thiruvananthapuram, Jaipur and Guwahati — to Adani Enterprises, a political slugfest has started over the privatisation of the Thiruvananthapuram airport. Kerala Chief Minister (CM) Pinarayi Vijayan wrote to Prime Minister (PM) Narendra Modi, saying the “unilateral decision” taken by the Centre was against the wishes of the people of the state.

Last year, the government had invited bids from private players to operate these airports for 50 years on a public-private partnership (PPP) basis. The Airports Authority of India (AAI), which currently manages these airports, in February 2019, announced the bids received from nine companies for privatisation of six airports including Lucknow, Mangaluru and Ahmedabad. Adani Enterprises outbid other companies for all six of these airports.

On Thursday, Kerala’s Finance Minister Thomas Isaac said Kerala government’s claim to managing the airport was rejected even after it offered to match Adani Enterprises’ bid. As per AAI, for the Thiruvananthapuram airport, it received a per-passenger fee bid of Rs 168 from Adani, while Kerala State Industrial Development Corporation Ltd (KSIDC) bid Rs 135.
The Kerala government’s request to de-link the Thiruvananthapuram airport dates back to November 2018 — shortly after the Centre’s in-principle approval for privatising the six airports, senior Ministry officials said. In a representation made to the Centre, the Kerala government had cited its experience in development of greenfield airports at Kochi and Kannur, in addition to the contribution in form of land parcels at Thiruvananthapuram airport, and requested a committee for development and operation of the airport through a special purpose vehicle with the Kerala government as chief promoter, one official said.
Following this, an Empowered Group of Secretaries was constituted and the Ministry of Civil Aviation requested the Kerala government to make a presentation before the panel. Thereafter, Kerala suggested either transfer of the airport to itself for operation and management by forming an SPV, or offer the right of first refusal (RoFR) to the SPV of Kerala government in a bidding process.

The secretaries’ panel then recommended offering the state government SPV the RoFR as one of the options, provided that the SPVs bid fell within the range of 10 per cent of the highest bid. An AAI official said: “Since the quote of KSIDC was 19.64 per cent less than the highest quote of Adani, Government of Kerala was unable to benefit of RoFR”.

“We hope that the Prime Minister and the central government understand the Kerala people’s resentment against handing the Thiruvananthapuram airport to a private firm. This airport was built and developed with the contributions made by the state government and the people. We do feel that the Prime Minister realises the importance of appreciating the stand taken by the state government and the major political parties in the state. Kerala government has got the expertise in running the airports — both Kochi and Kannur international airports are testimonies to it,” Vijayan told The Indian Express.
In his letter to the PM, Vijayan wrote: “In my letter dated 10.06.2020, the request to hand over management and operation of the Trivandrum International Airport to the SPV in which the State Government is the major stake holder was reiterated. This has not been considered and the present decision has come even while the litigation in this regard is pending before the Hon’ble High Court of Kerala as per the direction of the Hon’ble Supreme Court”.

The AAI official cited above said during the presentation made to the Empowered Group of Secretaries, the then Chief Secretary of Kerala mentioned the letters given by civil aviation ministry in 2003, in which it “assured the state government will be consulted as and when a decision to induct private sector is taken.”
21/08/20 Pranav Mukul , Liz Mathew/Indian Express
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