INSUBCONTINENT EXCLUSIVE:
With the six-airport deal, Adani will foray into the airports space.In the recent privatisation bid for six Airports Authority of India
(AAI)-run airports in major state capitals, which was won by ports major Adani Enterprises, the government for the first time received bids
from foreign fund managers, Board Member (Finance) S Suresh has told TheIndianSubcontinent.Last week, Adani Enterprises bagged contracts for
operating, maintaining and upgrading six airports in a public-private partnership with the AAI for a period of fifty years.With the
six-airport deal, Adani will foray into the airports space
It had bid aggressively for the airports, facing established players such as GMR
With a single swoop, it is set to become the third-largest airports operator in the country, according to research firm ICRA."We wanted to
bring in more foreign airport operators, but given the business conditions here they weren't very keen to align and come in as second
This time we even had pension funds to show interest in the airports" Mr Suresh said.The airports include five in state capitals - Lucknow,
Ahmedabad, Jaipur, Thiruvananthapuram and Guwahati.The fact that experience in the airports space had been key to allotment of these
projects, but was dropped as criteria in this privatisation process, has raised questions from rivals and opposition parties.A CPM leader
from Kerala has called for a probe into the bidding process after Kerala Chief Minister Pinarayi Vijayan raised objections to Adani being
awarded the Thiruvananthapuram airport despite lack of experience in the airport operations space.The government says it was essential to
remove the experience criteria to receive competitive bids.The board member (finance) in the AAI told TheIndianSubcontinent, "The per pax
concession fee model ensured substantial competitive bids
By having a restrictive condition of airport experience we saw it wasn't bringing competitiveness."Of late, bids for greenfield airports
were not competitive and for getting the actual value of asset, condition of an essential airport experience would've been a restrictive
factor, Mr Suresh said."For Ahmedabad for example, GMR only quoted Rs 85 (per passenger), Adani quoted Rs 177, NIIF quoted Rs 146 and AMP
Capital quoted Rs 127; it was quite competitive."Experience is considered important for greenfield projects
But the six airports the government is privatising are brownfield project, he said."Adani has been aggressive because the company wanted to
enter the airports space, so they put in the highest bids and got the deal
There was competition," he added.Asked whether the government will incorporate a review mechanism in the contract with Adani, Mr Suresh said
there are enough conditions in the contract and it will not be a cakewalk for Adani Enterprises
"They'll have to fulfil stringent conditions and meet international standards," he said.On the allegation that the Adani group's proximity
with the government helped it get the airports deal, he said, there was no infirmity in the bidding process, if at all there was a point of
The courts have cleared the process
None of the political parties are complaining either."I disagree that Adani got the airports because of political backing
They're an aggressive party who bid aggressively and won," he added.In an official statement, Adani said: "The Indian aviation industry is a
growing sector with the government's continuing focus on creating world-class airports
For the Adani group, initiatives that contribute to nation-building remain a focus area
We would be aiming to scale up infrastructure to bring these facilities on-par with global standards."The bids are now pending before the
Cabinet, and the contract will be awarded to Adani only after they are accepted by the government.Mr Suresh said the AAI will look at longer
timelines next time on to attract more foreign airport operators
Paris's Charles de Gaulle airport had also expressed interest in the bidding, but couldn't because of the tight timeline.He added that the
experiment by bringing the foreign fund managers has proved beneficiary, because they gave the toughest fight in the bidding process.GMR and
GVK declined to comment on the matter.
