CVC forwards complaint against leasing airports to Adani to Ministry's CVO

The Central Vigilance Commission has forwarded a complaint by CPI(M) Rajya Sabha leader Elamaram Kareem accusing gross financial irregularities in the leasing out of six airports, including Mangaluru, to Adani Enterprises to the Chief Vigilance Officer of the Ministry of Civil Aviation for "necessary action".

Kareem had, on September 4, written to Chief Vigilance Commissioner Sanjay Kothari seeking an enquiry into the deal that hands over the Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Manguluru airports, which he claimed was paving the way for the Adanis to "earn windfall profit from the vast assets and businesses" of Airports Authority of India (AAI) across six states.

In a letter to Kareem, Central Vigilance Commission Additional Secretary Sudhir Kumar on September 17 said that the "complaint along with its enclosures are forwarded" to the Chief Vigilance Officer of the Ministry of Civil Aviation for "necessary action."

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Amid protests, the government had last month cleared the proposal to hand over the airports to Adani Enterprises. Civil Aviation Minister Hardeep Puri had earlier rejected criticism and allegations against the government move and said the government should not be running airports and airlines.

In his complaint to the CVC, Kareem claimed that the official records showed that there was "gross negligence" while preparing Public Private Partnership Appraisal Committee (PPPAC) memo and other related records, paving way for the private player to "earn windfall profit from the vast assets and business" of AAI spreading across six states.

"It is prima facie evident that neither AAI nor the Ministry exercised any reasonable care and prudence, which it usually follows, while placing even comparatively low-value tenders. Most of the vital financial parameters in the bid document, including the total project cost, minimum bid value etc. were kept open, giving free hand to the private player to shape the contract in their fashion," Kareem alleged.

He also claimed that the Empowered Group of Secretaries had interfered into the affairs of PPPAC, though they were not legally entitled to do so. It is pertinent to note that the proposed deal also violates the provisions of AAI Act, 1994 and Aircraft Rules, 1937, making the entire process void ab initio, he added.

The CPI(M) MP claimed that the AAI did not compare the amount quoted by Adani Enterprises with the corresponding existing fee per passenger to ensure that the PPP is giving economic advantage to AAI. Instead the AAI and Ministry are trying to "glorify the rate quoted" by Adani Enterprises by comparing the rate quoted by other bidders. "In the absence of Minimum Reserve price, the chances of forming a cartel among bidders are more and same need to be inquired by Competition Commission of India," he said.

In the letter, he claimed that there is huge deviation in the rates quoted by the various bidders, which is more than 600%, and it showed that the project had been conceived differently by different investors.

"The lack of clarity and non – revealing of major financial covenants (including Total Project Cost!) contributed for extremely low quotes by some of the private players. Though the six Airports are entirely different in all aspects, AAI adopted the same technical and financial capacity, which proves clearly that the projects had not been properly envisaged, studied and presented by AAI, questioning the very essence of transparent bidding process," he added.