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Exclusive: AAI likely to ask Adani Group to take over 3 airports by Nov, 6-month extension unlikely

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Exclusive: AAI likely to ask Adani Group to take over 3 airports by Nov, 6-month extension unlikely

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The Airports Authority of India (AAI) is unlikely to provide a six-month extension to Gautam Adani-led Adani Group for taking over the three airports of Lucknow, Ahmedabad and Mangalore, sources close to the development told CNBC-TV18.

The Airports Authority of India (AAI) is unlikely to provide a six-month extension to Adani Group for taking over the three airports of Lucknow, Ahmedabad and Mangalore, sources close to the development told CNBC-TV18. The state-run airport operator is now expected to ask the Gautam Adani-led conglomerate to commence commercial operations at the airport by completing all conditions and financial closure by November 2020, sources said, indicating an extension of three months.

AAI is likely to have decided on a three-month extension as compared to six months due to partial resumption of domestic flights, permission to some categories of foreign nationals to arrive in India, removal of some lockdown restrictions and phased resumption of economic activities outside containment zones.
As per the original plan, Adani Group was to complete financial closure and start commercial operations within 180 days from February 14, 2020, when the AAI board approved the concession agreement between the statutory body and Adani Group. Hence, the earlier deadline was August 2020.
In addition, AAI is also unlikely to grant moratorium to Adani Group for payment of monthly Concession Fee for six months, as requested by the latter.
It is important to note that the AAI had bid out six of its airports in 2019 and Adani Group had emerged as the highest bidder for all six airports. While the Union Cabinet is yet to approve the bids of Jaipur, Trivandrum and Guwahati, Adani Group signed the takeover agreement for operations, development and maintenance of the remaining three airports in February 2020.
Under a two-stage tender process, which concluded February 2019, Adani Group made entry into Indian aviation and emerged as the highest bidder for all six airports, quoting the highest per passenger fee to be paid to the AAI on a monthly basis.
The Ahmedabad-based conglomerate had surprised the industry with its aggressive bids. At Rs 115 per passenger for Manguluru and Rs 171 for Lucknow, Adani Group’s bids were over 500 percent more than the lowest bids received from the GMR Group and PNC Infratech respectively.
Similarly, it placed a bid of Rs 177 for Ahmedabad airport, nearly 200 percent more than the lowest bid of Rs 60 of Autostrade Indian Infrastructure Development Pvt Ltd.
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.
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