Ministry of Civil Aviation

86 Registration Were Received In the Portal for 6 Airports Under the PPP Bidding Process

Press Note

Posted On: 21 JAN 2021 4:59PM by PIB Delhi

In a news article dated 15.01.2021  it has been reported that “Finance Ministry and NitiAayog had raised red flags before Adani’s clean sweep of six airports”  over the 2019 PPP bidding process and the same was ignored by the Government. This statement 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. It may also be noted that during the bid processing stage the entity which would be successful was not known to anybody. 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.

After opening of the financial bid of technical qualified bidders, it was revealed that the quote of M/s. Adani Enterprises Limited was highest in all the six airports. As the tender process of each airport was undertaken on individual basis but at the same time the bidder whose quote is highest was considered as per the provisions of the bid document.

The statement made that both Ministry of Finance  and NitiAayog had recorded objection about the airport bidding process carried in 2019 is factually incorrect and short on facts for the reasons that 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. EGOS 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 quantum of passengers handled by the private airport operators iscrucial and important than the number of airports handled by a single entity.Further, 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.

 

On the issue of ignoring the recommendations of DEA and NITI Aayog, it should be noted that  bothEGoS and PPPAC comprises members from Ministry of Finance (Department of Economic Affairs & Department of Expenditure), NITI Aayog and  Civil Aviation.  Therefore, the Ministry of Finance and NitiAayog already deliberated and finalized the contours of the bidding process in the EGoS and subsequently appraised the proposal in the PPPAC. Therefore the statement that the views of Ministry of Finance and NitiAayog were ignored is factually incorrect and based on assumption as the views of Ministry and Finance and NitiAayog on various aspects of the proposal are part of the established procedure  of PPPAC to ensure that all the aspects are examined before the proposal is placed before PPPAC for decision and same cannot be considered as overruled.

 As regards acquisition of stake in the Mumbai airport by M/s Adani Enterprises Ltd.and at the same time seeking extension from AAI for taking over the three Airports i.e. Ahmadabad, Lucknow and Mangalore, it is stated that both the transactions are independent of each other. The sale of stake of private entities in MIAL is purely guided by contractual provisions of Shareholders Agreement of MIAL. Any of the shareholders is free to sell his stake after following the due process prescribed in the SHA, which is yet to be completed.The acquisition of shares can be done by any entity following the right of first refusal process specified in the shareholders’ agreement, after the expiry of lock-in-period. Such   transaction have taken place earlier also as in the case of Bangalore airport. The shares of L&T and Zurich were acquired by GVK Airports Holding who in turn sold to Fairfax.

 As regards, extension of CoD at three airports beyond the stipulated six months from the signing of concession agreement, the situation had arisen due to Covid-19 pandemic resulting into difficulty in physical takeover of the airport on account of Logistics. Further, the article reported that the 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 is important to note that the allegation brought out in the above article were also the allegations submitted by various petitioners in the High Court of Kerala opposing PPP mode of operation of AAI airport which were heard and decided on merits and finally the Court vide its judgement dated 19.10.2020 dismissed all the Petitions upholding the PPP process undertaken by Government of India. 

In view of above the newspaper article issuppressioveri and suggestiofalsi

 

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RJ/NG



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