Thursday, October 07, 2021

Adani paid Rs 74.5 cr for Mangaluru airport assets valued at Rs 363 cr, says AAI union

The Airport Authority Employees Union (AAEU) has alleged that for three of the six airports that the Adani Group won bids for –Mangaluru, Lucknow and Ahmedabad– the amount that the Adani Group paid for the airports assets as per the final agreement is far less than what the Airports Authority of India’s bidding document states. Adani Enterprises has already taken over these three airports.

In 2018, six airports were chosen for privatisation by the Airports Authority of India (AAI). The Adani Group won the bid for all six airports in February 2019. Since then, controversy has followed, and the handover of these airports was delayed because Adani sought an extension due to the pandemic. Three airports have since been handed over and the company is likely to take over Thiruvananthapuram and Jaipur airports this month, as well.

The AAEU has alleged in a letter to the Prime Minister that while the bidding document says the final bidder should have paid Rs 1,330 crore towards AAI’s existing assets, Adani only had to pay Rs 499.84 crore in the end. The value of Rs 1,330 crore for the assets was pegged at the time when the Civil Aviation Ministry sought the approval of the Public Private Partnership Appraisal Committee (PPPAC). PPPAC is the Union government’s committee that looks into and approves Public Private Partnership projects.

The concessionaire agreement signed between Adani Enterprises and the Airports Authority showed that the amount that Adani reimbursed towards existing assets of the airport were at a fraction of the initial price.

As per the letter, the bidding document said that the amount to be paid towards assets were Rs 363 crore for Mangaluru airport, Rs 583 crore for Lucknow and Rs 384 crore for Ahmedabad. As per the final agreement, however, Adani had to pay Rs 74.5 crore for Mangaluru (a reduction of Rs 288.5 crore), Rs 147.93 crore for Lucknow (down by Rs 435.07 crore) and Rs 277.41 crore for Ahmedabad (down by Rs 106.59 crore).

The letter alleged that undue advantage was given to Adani and that almost all project parameters including the project’s scope, project cost, Minimum Reserve Price, Fair value of Existing assets etc “were neither ascertained nor published in bid documents”.

This is not the first time that the irregularities have been raised. In 2020, TNM reported that there were anomalies in the bidding process and how the Adani Group won the bid.  “The process of approving the project report for Adani was done in a hasty manner to favour only one bidder,” an office bearer of the AAEU had told TNM at the time.

07/10/21 Haripriya Suresh/News Minute

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