Lok Sabha Question No. 3682 (UNSTARRED), answered on 2021-03-18
Subject: Bidding Process for Privatisation of Airport
Ministry: CIVIL AVIATION
Asked by: Dean Kuriakose, M. Selvaraj, K. Muraleedharan, Behanan Benny, Anto  Antony, Saptagiri Sankar Ulaka, Uttam Kumar Nalamada Reddy, Vincent H Pala, A. Chellakumar

## GOVERNMENT OF INDIA LOK SABHA

UNSTARRED QUESTION NO: : 3682 (To be answered on the i8th March 2021)

## BIDDING PROCESS FOR PRIVATISATION OF AIRPORT

3682.

ADV. DEAN KURIAKOSE

SHRI M. SELVARAJ

SHRI K MURALEEDHARAN

SHRI BENNY BEHANAN

SHRI ANTO ANTONY

SHRI SAPTAGIRI SANKAR ULAKA

SHRI UTTAM KUMAR REDDY NALAMADA

SHRI VINCENT HPALA

DR A. CHALLAKUMAR

## Will the Minister of CIVIL AVIATION

be pleased to state: -

- (a) whether the Ministry is aware of the concerns raised raised by NITI Aayog and Department of Economic Affairs on the airport bidding process in 2019, where the Adani group had been awarded six airports and if SO, the details of the action taken on such objections;
- (c) whether the Ministry received objections from any State against such privatization and if s0, the details of action taken on such objections;
- (b) whether public consultations were held before the privatization of these airports and if $O, the details thereof, including the number and dates of such consultations along with participating stakeholders and if not; the reasons therefor;
- (d) the present status regarding privatisation of Trivandrum Airports;
- (f) if so, the reasons for overruling the same and awarding all the six airports to the same bidder?
- (e) whether there was any objection against lack of experience and technical capacity of the bidder who was awarded the project; and prior

## ANSWER

Minister of State (IC) in the Ministry of CIVIL AVIA TION

(Shri Hardeep Singh Puri)

- (a): Airports Authority of India (AAI) has recently awarded six airports namely Ahmedabad in Gujarat; Jaipur in Rajasthan; Lucknow in Uttar Pradesh, Guwahati in Assam, Thiruvananthapuram in Kerala and Mangaluru in Karnataka for Operations, Management and Development under Public Private Partnership (PPP) for & lease period of 50 years: The terms and conditions of the transaction 0f PPP of six airports were decided by the Empowered Group of Secretaries (EGoS) Chaired by CEO, NITI Aayog which inter-alia comprised of Secretaries %f Ministry 0f Finance (Department of Economic Affairs and Department of Expenditure) also. Therefore; the Ministry %f Finance and NITI Aayog were of the decision making process and the EGoS finalized the contours of the bidding process for PPP of six airports In order to ensure more competition and to give more flexibility to bidders, the following conditions among others were stipulated:part
- i. No prior airport experience
- ii: No cap o number of airports a participating entity could bid for iii. Per Passenger Fee as bidding parameter instead Of revenue sharing
- (b): In accordance with the provisions of Section 12A of AAI Act; 1994 (as Government of India, may make a lease of the premises 0f an airport (including buildings and structures thereon and appertaining thereto) to carry out some of its functions; in the public interest or in the interest of better viz; Delhi, Mumbai, Ahmedabad, Lucknow; Mangalore; Jaipur, Guwahati and Thiruvananthapuram for Operations, Management and Development under Public Private Partnership (PPP) mode; where the ownership of these leased airports remains with AAT:
- (c) & (d); The observations of State Governments concerned, if any, are considered on merit during the transaction process for PPP of airports As regards Thiruvananthapuram airport; Government of Kerala (GoK) had suggested () Transfer of Thiruvananthapuram airport to GoK for operation and management by forming an Special Purpose Vehicle (SPV) or (ii) offer Right of First Refusal (RoFR) to the SPV of GoK. The Central Government considered the views of GoK and offered following two options to the Govt; of Kerala as a special case in respect of PPP of Thiruvananthapuram airport:

OPTION A: Govt of India will invite Chief Secretary and other officials of Govt: of Kerala as special invitees for the purpose Of participation in the selection process for the PPP partner of Thiruvananthapuram airport s0 as to address the concernslinterests of the State Govt

OR

OPTION B: To proceed with alternative option of RoFR as suggested by GoK with the stipulation that an entity/SPV in which GOK has a direct equity of

26% or more, provided the SPVs bid falls within the range of (plus or minus) 10% of the highest bid.

GoK, vide their letter dated 18.12.2018, accepted OPTION B i.e. RoFR for Govt: of Kerala Sponsored Entity with range parameter of (plus or minus) 10 % of the highest bid. Accordingly, the Request for Proposal (RFP) document for Thiruvananthapuram airport was amended and the provision of RoFR benefit to the State Govt. designated entity was incorporated:

AAI has completed the bidding process wherein M/s Adani Enterprises Limited (AEL) has quoted the highest bid for Thiruvananthapuram airport: AAI has issued Letter of Award in respect of Thiruvananthapuram airport on 01.09.2020 to the Concessionaire: Concession Agreement was signed between AAI and Mls AEL on 19.01.2021 for Thiruvananthapuram airport:

(e) & (f): The terms and conditions of the transaction of PPP of six airports were decided by the Empowered Group of Secretaries (EGoS) chaired by CEO, NITI Aayog which inter-alia comprised of Secretaries Of Ministry of Finance (Department of Economic Affairs, and Department of Expenditure) decision making process and the EGoS finalized the contours and decided not to make airport experience as a pre-requisite for the bidding process for PPP of six airports.