Livemint | Kerala HC upholds Adani airport deal

Oct 20,2020

The Kerala high court on Monday allowed billionaire Gautam Adani to operate the airport in state capital Thiruvananthapuram, rejecting the state government’s contention that the privatization was not in the public interest.

In February 2019, Adani Enterprises Ltd (AEL) had won the rights to operate six airports, including Thiruvananthapuram, in an auction conducted by the Airports Authority of India (AAI).

The state last year challenged the award in the high court, which rejected its petition. The state appealed the verdict in the Supreme Court, which asked the HC to hear the case afresh.

The state assembly also passed a resolution against the privatization.

A division bench of justices K. Vinod Chandran and C.S. Dias, however, rejected the state’s contention that it is entitled to preferential consideration over AEL under Section 12A of AAI Act just because the airport land belongs to the government. The state may appeal the verdict in Supreme Court, according to two people aware of the matter.

An Adani spokesperson declined to comment.

State government agency Kerala State Industrial Development Corp. (KSIDC) was one of several bidders in the auction conducted by AAI, which had allowed the state to match the winning bid if it was within 10% of the quoted price.

However, when bids were opened, Adani was found to have bid ₹168 per passenger, KSIDC ₹135 and GMR Airports ₹63.

The Kerala government offered to match Adani’s bid, but since its bid was nearly 20% below Adani’s, it was considered ineligible to do so.

Monday’s verdict is a shot in the arm for Adani Enterprises’ ambitions in the airport sector. On 1 September, the company acquired Mumbai International Airport Ltd, the operator of India’s second-busiest airport.

Union civil aviation minister Hardeep Singh Puri had earlier said that the Thiruvananthapuram airport award will be subject to the outcome of Kerala’s petition.

The Kerala government claims it had previously transferred 23.57 acres currently worth ₹250 crore to AAI, which operates the airport now.

It says the land was transferred free of cost to build an international terminal, subject to the condition that the value of the land would be reflected as its share capital in a state-run company when the airport is privatized.

The government is in the process of taking over another 300 acres of prime land for the airport and has threatened to not cooperate with AAI if the airport were to be given to a private company.

However, Bhartiya Janata Party leaders and at least one Congress leader—Thiruvananthapuram member of Parliament Shashi Tharoor —have dismissed the government’s demands.

The Congress, which is in opposition in Kerala, had joined hands with the Pinarayi Vijayan-led Left Democratic Front government to oppose the airport privatization.

The state government’s complaint about the auction outcome after fully participating in the bidding merely exposes its double standards, Tharoor had told reporters.

The government’s concerns about public land being transferred to a private party are also unfounded, according to Tharoor.

“The ownership of land and airport, as well as the responsibilities of ATC (air traffic controller), security, customs, and immigration still remain with government agencies. No one is ‘giving away’ the airport. This is simply an operating contract," Tharoor had said.