KSIDC moves to block ‘inexperienced’ Adani arm from airport deal.

The Kerala State Industrial Development Corporation Ltd (KSIDC), which has never run an airport, and lost the bid to run the one in Thiruvananthapuram, has sought court intervention to block Adani Enterprises, which placed the winning bid, from taking over operations. It cited, among other things, Adani’s lack of experience in operating airports.

Adani Enterprises had quoted the highest per-passenger fee of Rs. 168 in the auction to lease the airport for 50 years. KSIDC came second with Rs. 135. The difference in the price bids was 19.7 per cent, denying KSIDC the deal.

Prior to the invitation of price bids, the Kerala government had wrested an assurance from the Centre that if its quote came within 10 per cent of the highest bid, it would be allowed to match that rate.

Last week, the Kerala High Court declined to grant a stay on issue of a Letter of Award (LoA) to Adani Enterprises on a petition by KSIDC, but said the entire process would be subject to the final order of the court.

KSIDC has submitted before the court that the Airports Authority of India (AAI) should desist from awarding the lease rights to Adani, arguing that it was “not comfortable” with the way the process was carried out, in a “hasty manner”. It said the time given to quote a price — six days — was very short, and that Adani had nil experience.

Conversion to equity

“The Central government had promised (when the Kerala government had handed over the land) that if there is any move to privatise the airport, the State would be consulted and we had demanded that the value of the land should be converted into equity. It is in writing,” a Kerala government official claimed.

The court case has somewhat marred Adani’s spectacular show in the auction for leasing six non-metro airports, where it made a clean sweep.

“I’m surprised by the legal arguments put forth by KSIDC on behalf of the Kerala government — that Adani does not have prior experience in running airports. KSIDC also participated in the tender. What prior experience does KSIDC have? Nothing,” a former director who ran four AAI airports told BusinessLine .

According to rules framed by the Centre in 2007, tenders for sector-specific infrastructure projects do not require participating firms to have prior experience in that sector, but their eligibility is measured in terms of their experience score.

The State’s claims that the Centre had agreed to “consult” it before privatising the airport and on conversion of land value into equity are also without basis, said the former official.

The convention is that the land required for undertaking development in airports owned by the Centre is given by the State free of cost and free from encumbrances.

HBL