From the Viewsroom

Winner takes it all

Ashwini Phadnis | Updated on March 10, 2019 Published on March 10, 2019

Adani bagged all airport development bids — but how?

The hasty manner in which the government has gone ahead with the development of six airports — Mangaluru, Lucknow, Jaipur, Ahmedabad, Thiruvananathapuram and Guwahati — is cause for concern. What is remarkable is that the Adani group, which has no experience in running airports, has won bids for all the six airports. The bids were based on the highest monthly fee per passenger that the bidder concerned would pay the government.

With no prior experience in running airports, and with Guwahati and Ahmedabad being positioned as the next gateways for flying, how sensible was the decision to not include previous experience as a criterion for bidding? When GMR and GVK were given the rights to operate Delhi and Mumbai airports, respectively, they were awarded these contracts with the precondition that they needed to tie up with airport operators. So GMR got Frankfurt airport as a partner and GVK got South African airports before they bid. The government followed a similar hasty approach for its much touted UDAN scheme. Companies without any experience in running an airline were allowed to bid. When officials were questioned as to why previous experience of running an airline was not made a condition, the standard reply was “this is not the norm anywhere.” Given that UDAN was promoted as the first-of-its-kind scheme, it is hard to fathom what norms the government was talking about.

Eventually, Air Odisha with no experience and Air Deccan with some experience in running an airline were unable to operate on a majority of the routes. One of the reasons was non-availability of aircraft. Having enough aircraft before bidding for the routes was another aspect that the government did not take into consideration.

Running an airline and an airport are specialised businesses. Pumping in money mainly for making easy returns raises questions about professional and security standards. The government has been lax in handling these aspects.

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Published on March 10, 2019
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