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Tags Current Affairs

Thiruvananthapuram Airport takeover

Date: 23 August 2020 Tags: Infrastructure

Issue

The Centre has decided to lease out the operation, management and development of the airport to Adani Enterprises for a period of 50 years, which has been opposed by State government.

 

Background

The Centre decided to lease out six airports in the country — Thiruvananthapuram, Ahmedabad, Jaipur, Lucknow, Mangaluru and Guwahati — through public-private partnership (PPP) to Adani Enterprises after the company emerged the highest bidder in a global competitive bidding process.

 

Details

  • Airports like Delhi, Mumbai, Hyderabad, Bengaluru that have been leased out on a PPP basis have witnessed creation of world-class infrastructure in addition to helping Airports Authority of India (AAI) in enhancing its revenues.

  • Kerala’s reservations date back to 2003, when it requested the Centre to include the state government whenever a decision to induct the private sector for managing the Thiruvananthapuram airport was taken.

  • The Centre has said that after various discussions and recommendations of an Empowered Group of Secretaries it was decided that the State would participate in the bidding process for the airport through a special purpose vehicle (SPV).

  • The Kerala SPV was also given the right of first refusal (RoFR), or a provision to match the winning bid, if its quote fell within 10 per cent range of the top bidder.

  • However, according to the Centre, KSIDC’s bid was 19.64 per cent lower than Adani Enterprises’ making it ineligible to exercise the RoFR provision.

  • While both the High Court and the apex court did not grant a stay on the privatisation process. The Supreme Court remitted the matter back to the HC, which is yet to give its final decision.

  • The centre has said that if the petitioners succeed and outcome of litigation leads to annulment or cancellation of bidding process, then Adani will handover the possession of airport back to AAI, which will be entitled to refund of the amount paid and additional investments made in the assets.

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