Supreme Court To Hear Kerala Govt's Plea Against Privatisation of Thiruvananthapuram Airport

Supreme Court To Hear Kerala Govt's Plea Against Privatisation of Thiruvananthapuram Airport

The Supreme Court of India (SC) heard the Kerala Govt's appeal against the Airport Authority of India's (AAI) decision to lease out Thiruvananthapuram International Airport to Adani Enterprises Limited.

A three-judge bench of the SC, headed by CJI Sharad Arvind Bobde and Justices A S Bopanna, V Ramasubramanian on 15 February 2021 said, "We will hear the matter after two weeks." The bench posted the matter on 16 March 2021.

The Government of Kerala had moved the Apex Court and filed an appeal against the AAI's decision to lease out Thiruvananthapuram International Airport, in the State, to Adani Enterprises Ltd.

The Special Leave Petition (SLP) filed by the state government contended that the grant of concession to Adani violated an earlier undertaking by the Ministry of Civil Aviation which had rejected the proposal of the state government to form a Special Purpose Vehicle (SPV) to take over and run the Airport on a revenue-sharing basis.

The background of the litigation is that the plea of the State Government was earlier dismissed by the High Court of Kerala (HC) wherein it had challenged the Central Government's decision to lease out the right of operation, management, and development of the Thiruvananthapuram international airport to Adani Enterprises Ltd.

A Division Bench comprising Justices K Vinod Chandran and CS Dias issued the order observing that it is a policy decision of the Union government and cannot be interfered with.

The State Government had challenged the lease on the following grounds-

Many clauses in the Request for Proposal (RFP) were tailor-made to suit private players.

Promissory estoppel and legitimate expectation.

The Assembly had on 24 August unanimously resolved to request the Union Government to avoid handing over the operation and management of the Thiruvananthapuram airport to private players and instead consider a Special Purpose Vehicle (SPV) formed by the state government.

The decision to go for the PPP mode of operation, management, and development of airports was taken purely on public interest. It was also a policy decision of the Union government.

The AAI Act having not permitted any cross-subsidization, by way of the utilization of the income generated from one Airport to augment the facilities of another.

The Union Government contended that the tender procedure was carried out in a transparent manner and special advantage was given to KSIDC considering the Kerala government's request.

The Union had no other option but to proceed with awarding the lease agreement to Adani Enterprises, the highest bidder, as the State Government entity KSIDC did not fall within the parameters of the RFP.

It was further submitted by the Centre that the award of the lease to the KSIDC by allowing it to match the bid amount of the highest bidder after the completion of the bidding process would have amounted to a violation of the entire bidding process.

It was claimed by the Centre that it had approved the grant of lease/concession of the airport to the highest bidder for 50 years subject to the security clearance from the National Security Agency. The decision taken by the Centre was in the interest of the airport.

Adani enterprises argued that the property acquired and transferred to AAI completely vest with the Authority and therefore neither the State Government nor KSIDC has any locus standi to lay any claim based on the transfer of such property.