Kerala HC Rejects State Government Plea Against Leasing Out Thiruvananthapuram Airport to Adani Group



Kerala HC Rejects State Government Plea Against Leasing Out Thiruvananthapuram Airport to Adani Group

The Kerala High Court (HC) has rejected a petition of the LDF government, challenging the Centre’s decision to lease out the Thiruvananthapuram International Airport to the Adani Group. Hours after the HC verdict, Chief Minister Pinarayi Vijayan told the media that the state is against handing over the airport to Adani group. In February 2019, Adani Enterprises Ltd (AEL) had won the rights to operate six airports, including Thiruvananthapuram, in an auction conducted by the Airports Authority of India (AAI). The state last year challenged the award in the high court, which rejected its petition. The state appealed the verdict in the Supreme Court, which asked the HC to hear the case afresh. A division bench comprising Justices K. Vinod Chandran and C.S. Dias rejected arguments by the state government and other petitioners against the Centre’s move to lease out the airport to Adani Enterprises through public private partnership (PPP) for a period of 50 years.

Referring to the unsuccessful bid by the Kerala State Industrial Development Corporation (KSIDC), the nominee of the state, under the Request For Proposal (RFP) (tender document) for the airport project, it said the petitions challenging the lease decision was a classic example of sour grapes. “We conclude that there is absolutely no valid ground to cause interference to the proceedings challenged in the batch of writ petitions. As is discernible from the averments in the writ petitions, the challenge is against privatization which is the declared policy of the Union Government,” it said.

With respect to airports, it was Public-Private participation which has been statutorily declared by incorporation of Section 12A to the Airports Authority of India (AAI) Act, it noted. “There is no challenge to the statutory provision. Interference to a policy framed by the elected government is trite, is difficult, and the feeble challenge raised herein against the policy is devoid of merit”, the court said. “The bid failed and both (the state and KSIDC) have now turned against the very RFP under which they participated, with an edge over other, the case set up by them, according to us, is a classic example of the proverbial sour grapes,” the bench said in its order.

It dismissed the batch of petitions filed by the state government, the KSIDC and a host of others challenging the Centre’s decision. The Adani Enterprises had won the rights to run six airports - Lucknow, Ahmedabad, Jaipur, Mangalore, Thiruvananthapuram and Guwahati - through the PPP model after a competitive bidding process in February, 2019.

The Union Cabinet had on August 19 this year gave its approval to lease out the Thiruvananthapuram airport, triggering opposition from the LDF government and political parties in the state barring the BJP. The state government had moved the high court last year itself against the privatization of the airport, but the petition was dismissed by the latter. After the government filed an appeal, the Supreme Court set aside the high court verdict and the matter was remanded back to it for a decision on merits.

Following the union cabinet approval, the state government had filed an application in the high court on August 21, seeking a stay on all further proceedings in relation to the grant of lease of the airport to Adani Enterprises till disposal of the main petition. During the hearing, the counsel for the Kerala government had argued that the RFP was in violation of and completely contrary to the scheme of the AAI Act. Opposing the Centre’s decision the state government had alleged the RFP was tailor made to suite Adani and revenue from the airport would be used for development of other airports which is against the scheme of the AAI Act.

Rejecting the state government’s allegations, the counsel for the Central government had said the argument that levying passenger fee from Thiruvananthapuram Airport and utilizing it for development of other airports was not factually and legally correct. He had also submitted that Section 22A of the AAI Act speaks about only development fee. It is specifically stated in the Draft Concession Agreement that the Concessionaire is not entitled to levy any development fee from the passengers.