AAI assets worth 1,300 crore at 3 airports sold to Adani for 500 crore, union says



The Airport Authority of India’s (AAI) aeronautical and non-aeronautical assets at three airports taken over by Adani have been transferred to a fraction of earlier estimates made when seeking government approval for the privatization, the union said. his employees.

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In an open letter to Prime Minister Narendra Modi on October 2, the Airports Authority Employees Union pointed out that assets valued at 1,300 crore at the time the Civil Aviation Ministry sought approval from the Committee of The government’s valuation public-private partnerships (PPPACs) were sold to Adani Enterprises Limited (AEL) for just 500 crore yen when it took over Mangaluru, Lucknow and Ahmedabad airports last year.

A total of six airports were tendered by the IAA in December 2018, and AEL was declared the highest bidder for each of them in February 2019. Of these, three were transferred to the AEL, and the other three are likely to be postponed. during that month after requesting an extension citing force majeure due to COVID-19.

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The allegations come at a time when the IAA reported losses in the last fiscal year for the first time since its inception – it suffered a loss of 2,814 crore compared to a profit of 1,985 crore over the past year. fiscal year 2020 – leading it to apply a salary reduction for its employees in July for a period of six months.

According to the contracts signed between Adani Enterprises and the IAA for the airports of Mangaluru, Lucknow, Ahmedabad in February 2020, the latter had to pay 74.5 crore, 147 crore and 277 crore ₹ for the aeronautical and non-aeronautical assets of the three airports. . These assets form the basis of regulatory assets and the amount was to be paid within 90 days of the date of commercial operation.

However, when these figures are compared to the estimates prepared by the Ministry of Civil Aviation in its proposal to the PPPACs, they represent a deficit of 80% for Mangaluru airport, 75% for Lucknow and 28% for Ahmedabad.

According to the discussion report of the 85th PPPAC meeting held on December 11, 2018, these properties were valued at 363 crore at Mangaluru airport, 583 crore at Lucknow airport and 384 crore at Ahmedabad airport. .

The Hindu verified the figures cited in the three contracts and the PPPAC document.

Airport

Amount to be reimbursed by the successful bidder for the cost of IAA assets according to the minutes of discussion of the 85th meeting of the PPPAC on December 11, 2018 Amount quoted in the contract with Adani Enterprises Difference
Mangaluru ₹ 363 crore 74.5 crore ₹ 288.50 crore
Lucknow ₹ 363 crore 147.93 crore ₹ 435.07 crore

In response to questions sent by e-mail to the Adani group, the latter replied that it fulfilled the conditions set out in the tender document for the privatization of six airports.

“In accordance with the tender documents given to all bidders, the concessionaire was required to pay the amount of investments made by AAI as at 31.03.2018, which was predefined in the respective concession contract,” said a holder. word of the group Adani.

These fees were paid by Adani. In addition, the Concessionaire was also required to reimburse additional expenses incurred by the IAA for work undertaken after March 31, 2018, up to the date of the takeover. It was not clear from the response whether this was paid for by AEL.

Several questions have been raised in the past about the Adani deal. The Hindu reported in July 2019 that the PPPAC led by then Economic Secretary Subhash Chandra Garg dismissed several key suggestions made by the Ministry of Finance and NITI Aayog, which effectively led Adani to win all six airports . These included a cap on the number of airports that could be bagged by the same entity and the requirement of prior experience in operation and management. The employees’ union also raised these points in its letter and demanded that the prime minister order a suspension of the transfer of the three remaining airports as well as a judicial inquiry into the privatization process.

SC Garg, who resigned from government after being dismissed from his post as finance ministry secretary at the energy ministry, said The Hindu, “The decisions were made by the PPPAC. I was the chair of this committee and I stand by those decisions, but the decisions were not mine. These were unanimous decisions of the entire committee, which also included the Joint Secretary of the Department of Economic Affairs and Councilor NITI Aayog, who made the suggestions (to which reference is made) and both signed the decisions. Their suggestions were in the nature of initial observations, but ultimately even these two members were part of the decision made by PPPAC.


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