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Uncertainty looms over Adani Group's entry into aviation space

Updated : March 29, 2019 09:35 PM IST

A cloud of uncertainty looms over Adani Group’s entry into the aviation sector. While Adani Enterprises has emerged as the highest bidder for the airports of Jaipur, Lucknow, Thiruvananthapuram, Mangaluru, Guwahati and Ahmedabad, the clearance of these bids will now depend on the next government that comes to power in the upcoming Lok Sabha elections, government sources told CNBC-TV18.

It is learnt that the union civil aviation ministry had sent a note to the cabinet seeking approval of Adani Enterprises’ bids but was asked to respond to “certain queries.”

“Bidding process is over, but the cabinet has not approved these bids yet. Cabinet note was sent but answers to some simple queries were sought. As the model code of conduct is now in place, the fate of these bids will depend on the next government which comes to power,” one of the sources said.

In November, the union cabinet had decided to privatise six state-run airports with the aim of increasing the airports’ revenue streams and raising their efficiency and quality. The bidding process came to a conclusion on February 26 when the financial bids were opened for all six airports.

The airports are to be provided on a lease period of 50 years and in order to invite greater participation, prior airport experience was not among the mandatory bidding criteria.

However, several industry players have questioned the government on allowing players without any prior airport experience to take part in bids.

In fact, days after Adani Group emerged as the highest bidder for all six airports, Kerala government-owned Kerala State Industrial Development Corporation moved the state high court against the decision of Airports Authority of India to award Thiruvananthapuram airport to a company with no prior airport experience.

Adani Enterprises had quoted the highest per passenger fee for Thiruvananthapuram at Rs 168 to be paid by the company to the state-run airport operator on a monthly basis, outpacing KSIDC’s bid of Rs 135 and GMR Airports’ bid of Rs 63.

The Gautam Adani-led group also emerged as the highest bidder for Jaipur airport at Rs 174, for Ahmedabad airport at Rs 177 per passenger, for Mangaluru at Rs 115 rupees, for Lucknow airport at Rs 171 rupees and for Guwahati at Rs 160 per passenger.

If the current government comes back to power, these bids are expected to be approved, but in case there is a change of power at the centre, then there is an uncertainty which looms over this process, a senior government official said. A comment from Adani Group is awaited.
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