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AAI mulls Adani’s request for time to take over 3 airports

Shishir Sinha New Delhi | Updated on June 20, 2021

Adani seeks 6 months from July to take over Tripura, Guwahati, Jaipur airports

The Airport Authority of India (AAI) will soon take a call on giving more time to wholly-owned subsidiaries of Adani Enterprises to take over the Thiruvananthapuram, Guwahati and Jaipur Airports. The initial deadline ends in July.

“The Concessionaires of Guwahati, Jaipur and Thiruvananthapuram airports —Adani Guwahati International Airport (AGIAL), Adani Jaipur International Airport (AJIAL) and Adani Thiruvananthapuram International Airport (ATIAL) — have sought an additional time of six months to satisfy conditions precedents and achieve commercial operation date (COD) and financial close due to the second wave of Covid-19,” a senior Government official told BusinessLine.

Also read: Overall passenger traffic plunges 66% in FY21, AAI data shows

According to the concession agreements signed on January 19 by AAI, the concessionaires are required to achieve COD and financial close within 180 days from the date of signing of the agreement. “Under the provisions of non-political force majeure events in the concession agreements, the concessionaires have sought additional time period of six months. The request of the Concessionaires is under consideration of AAI,” the official said.

The uncertainties

Though many States are easing lockdowns, there are uncertainties which will be the key factors to decide on the extension. The official said: “After evaluating the situations in Assam, Rajasthan and Kerala, where the concessionaires are required to take over the Guwahati, Jaipur and Thiruvananthapuram airports, an appropriate decision would be taken soon by AAI in accordance with the provisions of the agreements.”

This development is taking place at a time when India is still facing the second pandemic wave. Though, unlike the first wave, domestic air travel has not been suspended this year, local lockdowns have affected all types of travel, with domestic air passenger traffic in May falling 63 per cent to around 21.15 lakh passengers vis-a-vis April. Similarly, passengers carried by domestic airlines during Jan-May 2021 were 312.23 lakh as against 331.94 lakh during the corresponding period of previous year thereby registering annual de-growth of 5.94 per cent. Regular international flights are still suspended.

After its decision of leasing out airports for operation, management and development under Public-Private-Partnership (PPP), AAI released a Request for Proposal (RFP) on December 14, 2018 through global competitive bidding wherein per passenger fee is the bidding parameter. The technical bids were opened on February 16, 2019 and the financial bids of the qualified bidders were opened on February 25-26, 2019. Adani Enterprises won all the bids by quoting highest per passenger fee for all the three airports —Thiruvananthapuram, Guwahati and Jaipur.

On August 19 last year, the Union Cabinet approved the proposal of leasing out to Adani for a period of 50 years.

Published on June 20, 2021

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