Gautam Adani is putting his airport ambition on hold | Economic Times

Mumbai: The Adani Group has told India’s state-run airport developer that it won’t be able to take possession of the three privatised airports in Ahmedabad, Lucknow and Mangaluru this calendar year due to the disruption caused by the Covid-19 pandemic. The infrastructure conglomerate has invoked the force majeure clause in the contract, several people in the know said.The group has also asked the Airports Authority of India (AAI) to defer the deadline for payment of asset transfer fees of over ₹1,000 crore for these airports from August to beyond December 2020, the people cited above said.On February 14, the group had signed concession agreements with AAI to maintain, develop and operate the three airports. In 2018, it won the bid for six airports, which also includes Trivandrum, Jaipur and Guwahati but the concession agreement was signed only for Ahmedabad, Lucknow and Mangaluru. The total asset transfer fees for six airports is worth Rs 2,000 crore, said two people in the know.GVK Unable to Start Work on Navi Mumbai AirportThe fees include upfront payments to contractors for development work already assigned by AAI. Separately, the GVK group has also cited the force majeure clause to nodal body Cidco in Mumbai indicating it will be forced to delay the start of construction work on the Rs 16,000 crore Navi Mumbai airport project. 76187053Force majeure refers to a clause that is included in contracts to remove liability for natural and unavoidable catastrophes. Senior executives at AAI and CIDCO confirmed the developments and said their legal teams are looking into requests from Adani and GVK.“The concession agreement is signed. Now Adani needs to draw and sign registration and adjudication documents and take possession of the airport. They have requested a deferment. We will try to get the money and transfer possession this financial year. It’s too premature to say anything else,” said a top AAI executive.An executive at CIDCO was more specific and terse.“We haven’t decided what to reply to GVK but this clause can’t really be invoked. We resumed work on the Navi Mumbai airport project a month back and there is no reason why GVK can’t,” he said.An email to GVK remained unanswered. Adani Group declined to comment. The Covid-19 pandemic has gravely affected businesses across the world, primarily tourism and air travel. Airlines and airport developers worldwide are staring at huge losses and have taken stringent measures such as laying off vast swathes of workforce.Adani had cited aggressive concession fees while bidding for the six airports. Industry insiders said these now make no sense in the currently impacted business scenario.The AAI executive said Adani’s request for delay would lead to a shortfall in revenue targets for the state-run airport developer. In the worse-case scenario, the group can forfeit bank guarantees or so-called performance bids submitted for the three airports. But the executive said it was premature to think on those lines.The GVK-led consortium Mumbai International Airport Ltd which runs the current airport in Mumbai has won the bid for developing the Navi Mumbai airport.