Kerala High Court: Awarding of contract to Adani enterprises provisional

Adani Group has won the bid to operate six airports of Airports Authority of India - Ahmedabad, Jaipur, Lucknow, Mangaluru, Thiruvananthapuram and Guwahati.

Published: 28th February 2019 04:35 AM  |   Last Updated: 28th February 2019 04:35 AM   |  A+A-

By Express News Service

KOCHI: The Kerala High Court on Wednesday held that finalising the contract in favour of Adani Enterprises for operation, maintenance and development of Thiruvananthapuram International Airport will be provisional and subject to further orders on the writ petition. Justice Anu Sivaraman also directed that the concessionaire be briefed on the interim order.

The HC order came on the KSIDC plea seeking to declare the tender process as illegal and unconstitutional. Adani Group has won the bid to operate six airports of Airports Authority of India (AAI)-Ahmedabad, Jaipur, Lucknow, Mangaluru, Thiruvananthapuram and Guwahati.

Senior counsel Jaju Babu appearing for the KSIDC contended the technical and financial qualifications were tweaked in such a manner to enable a company with no prior experience in airport management to participate in the tendering process. Now, Adani Group has been declared as the most eligible bidder despite having no relevant experience. The group had quoted an incredibly high per passenger rates,  surpassing all the experienced fellow bidders, for running the six airports. Without any experience, the group has stolen a march over genuine bidders. Hence, the tendering process is a violation of principles of natural justice.

The petitioner submitted that apprehending the possibility of the airport’s privatisation, government had approached the Centre earlier. The Centre had categorically stated there were no plans to hand over the airport to any private agency. It was confirmed that any proposal with regard to privatisation will be done in consultation with the state government. While matters remained like this, the Centre decided to develop the airport on Public-Private Partnership (PPP) model. The Chief Minister also dispatched a letter on November 21, 2018, reiterating the necessity to continue the operation of the airport through an SPV( special purpose vehicle) with the  state as the chief promoter, .

According to the  KSIDC,  on account of being a state-run company representing the Government of Kerala, it is better placed than Adani enterprises. Additional Advocate General( AAG ) Ranjith Thampan submitted  the state government was taken for a ride by the AAI.  The Centre had earlier made it clear the airport will not be privatised, . The airport is situated on 628.59 acre, of which 258 acre belongs to the government, with 330 acre acquired by the AAI. The remaining 41 acre was acquired by the state and transferred to AAI free of cost. The government had spent nearly Rs 140 crore on the airport from 2000 onwards.

The AAG also made it clear  the state has been running CIAL and had experience in managing the airport. The state government will also file a writ petition challenging the tendering process, the AAG submitted.
Opposing the plea, Centre’s standing counsel Suvin R Menon submitted  the dispute between the Centre and the state will be adjudicated by the Supreme Court and not by the High Court. He informed HC the petitioner has no previous experience in running airports. It was not fair for an unsuccessful bidder to question the tendering process.

V Santharam, counsel for AAI, submitted the entire process has been completed and the only thing remaining is the awarding of the contract.

If the court intervened in the proceedings it will result in major losses to the exchequer. The court, while posting the hearing in the case to March 7, orally observed  AAI should inanswer the allegation regarding the contract’s viability.

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