Panel ignored advice on bidder: Officials

Two committees of senior bureaucrats sidestepped a suggestion by a junior official in the public private partnership (PPP) cell of the finance ministry to restrict a bidder from operating more than two airports on the grounds that the bidding clause would restrict private interests in airport privatisation, according to people aware of the matter. The Adani group clinched the six airports — Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru — in a global competitive bid by offering the highest revenue share to the government.

The Union cabinet chaired by Prime Minister Narendra Modi on November 8, 2018 gave “in-principle” approval for leasing out six airports of the state-run Airports Authority of India (AAI) through the public private partnership appraisal committee (PPPAC), chaired by the economic affairs secretary, and the empowered group of secretaries headed by the CEO of Niti Aayog to frame the bidding parameters for the leasing of assets to private entities, the people cited above said on condition of anonymity.

“After elaborate inter-departmental discussions, the committees finally framed and approved the bidding parameters that did not impose any restriction on the number of airports held by one single bidder. Both the finance ministry and the Niti Aayog had apex level of representation [chairpersons of the respective panels] in the two committees,” one of them, a government official, said.

The empowered group of secretaries headed by the CEO of Niti Aayog was created by the cabinet on November 8, 2018, a second official said. “It had the highest representation of ministries concerned, with the top official of Niti Aayog as its chairman, and other members included the civil aviation secretary, economic affairs secretary and expenditure secretary. This committee had the cabinet’s mandate to decide on any issue falling beyond the scope of the PPPAC,” he said.

Both the economic affairs secretary and the expenditure secretary are top bureaucrats of the Union finance ministry.

The Indian Express published a report on Friday saying the finance ministry and the Niti Aayog had raised red flags before Adani’s clean sweep of six airports. In February 2019, the AAI had declared Adani Enterprises Ltd the highest bidder for all six airports.

The ministries of finance and civil aviation, the Niti Aayog and the Adani group did not respond to email queries on the matter.

The government awarded airports to Adani on merit after evaluating open competitive bids and elaborate interdepartmental consultations. Some departments did raise certain issues, which were suitably addressed before the awarding the projects, the two officials quoted above said.

“It was global competitive bidding. Compared to five-six bidders, Adani offered the highest revenue [share] to the government in each projects. There was no bar on number of projects one could bid for. Hence, it emerged the winning bidder,” the first official said.

The second official said Adani’s bids were significantly high compared to the next highest bidders.

“On average Adani offered about 24% more revenue than the next highest bidders that included existing airport operators and international firms. Any deviation from the bidding condition would have serious legal and audit implications,” he said.