HomeAviation NewsAAI, Adani Group sign letter of agreement for Thiruvananthapuram, Guwahati, Jaipur airports

AAI, Adani Group sign letter of agreement for Thiruvananthapuram, Guwahati, Jaipur airports

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By Anu Sharma  September 11, 2020, 12:25:53 PM IST (Updated)

AAI, Adani Group sign letter of agreement for Thiruvananthapuram, Guwahati, Jaipur airports
The Airports Authority of India (AAI) has signed the letter of agreement with Adani Group for Jaipur, Thiruvananthapuram and Guwahati airports, sources told CNBC-TV18.


Adani Group has also submitted an undertaking to AAI, whereby it has promised that it will abide by the outcome in the pending rulings with respect to Thiruvananthapuram and Guwahati airports, the sources added.

On Aug 19, the Union Cabinet had approved leasing out the three state-run airports under a public-private partnership, thereby approving Adani Group as the highest bidder for the three airports.

The processes, which are necessary before the signing of the concession agreement, have kick-started including security clearance, etc, as per the sources.

"It is expected that the concession agreement for the three airports may be signed by the next two months," said a source.

It is important to note that some public interest litigations have been filed with respect to Thiruvananthapuram and Guwahati airports.

"The Union Cabinet has given its go-ahead for awarding the airport to the private party subject to the outcome of Writ Petition & in accordance with provisions of undertaking given by the Concessionaire," Union Civil Aviation Minister Hardeep Singh Puri had said on Aug 21 after Kerala expressed reservations against the takeover of Thiruvananthapuram airport following the Cabinet approval.

"If the petitioners succeed & outcome of litigation leads to annulment/cancellation of the bidding process then the Concessionaire will handover the possession of airport to AAI. They will be entitled to a refund of the amount paid to AAI & additional investments made in the assets. The Concessionaire will also not demand any damages from AAI," Puri had said.

Adani Group had emerged as the highest bidder for six AAI airports namely Lucknow, Mangalore, Ahmedabad, Jaipur, Guwahati and Thiruvananthapuram in February 2019.

While the Cabinet approved Adani Group as the highest bidder for the airports of Mangalore, Lucknow and Ahmedabad in July 2019, the takeover process for the three airports is likely to be completed by November 2020.

"AAI has started the handholding process for Lucknow, Ahmedabad, Mangalore airports with effect from today. This will continue over the period of the next two months," a source said.

As per the concession agreement signed for these three airports in Feb 2020, Adani Group was expected to take over the three airports within a six-month window, i.e. by August 2020. However, the group had sought an extension in the deadline in June by invoking the force majeure clause of public-private partnership agreement as work has been impacted due to the lockdown and ban on international flights amid COVID-19.

However, AAI granted a three-month extension as against a demand for six months.

In November 2018, the Union Cabinet had decided to privatise six airports to increase their efficiency and quality. The airports will be given on a lease period of 50 years. To invite greater participation, prior airport experience was not among the mandatory bidding criteria.

The multinational conglomerate has emerged as a leading player in the Indian airport industry after it signed an agreement to buy a 74 percent stake in Mumbai International Airport Ltd (MIAL), India's second busiest. As MIAL holds a 74 percent stake in Navi Mumbai International Airport Ltd, Adani Group will also hold a 74 percent stake in the much-anticipated airport at Navi Mumbai.
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