Kerala HC declines to grant stay on airport lease deal to Adani
05 March 2019
The Kerala High Court has declined to stay the central government decision to hand over the operations of the Thiruvananthapuram airport to infrastructure conglomerate Adani Group after the Kerala State industrial Development Corporation (KSIDC) filed a petition against the letter of lease award citing ‘inexperience’ as the reason.
The order came on a petition filed by Kerala State Industrial Development Corporation Ltd (KSIDC), which too has no prior experience in running airports and bid unsuccessfully for leasing the airport at Thiruvananthapuram.
Aggrieved KSIDC has now 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 Rs168 in the auction to lease the airport for 50 years, while KSIDC came second with a quote of Rs135. With a difference in the price bids of 19.7 per cent, KSIDC lost the opportunity to match the highest bid of Adani.
KSIDC claims it had an assurance from the centre of allowing it to match the highest bid if its own price bid is not more than 10 per cent lower than the highest bid.
While declining to grant a stay on the issue of Letter of Award (LoA) to Adani Enterprises, the high court, however, said the entire process would be subject to the final order of the court.
KSIDC had also complained of lack of time as the AAI had carried on with the process awarding lease right in a hasty manner and that the time (six days) was too short.
As things stand, KSIDC, which was nominated by the Kerala government, does not have any experience in running an airport.
Also, as per the 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. The sum total of the experience scores for all eligible infrastructure projects undertaken would be the aggregate experience score of a particular applicant.
Also, Adani won the LoA through a transparent bidding process, quoting the highest price.
The state’s argument about land rights has no basis either. Land at all airport operated by the AAI is owned by the central government. As per the convention, land required for undertaking development activities by the respective states or union territories and handed over free of cost and free from encumbrances to the central government.
Once the ownership of the land is handed over free-of-cost and free from encumbrances to the centre, expenditure on undertaking developmental activities at the airport will be funded entirely by the central government.