CBI books ex-AAI chairman for corruption in contract for food and beverage operator at airports
New Delhi (PTI): The CBI has registered a corruption case against former Airports Authority of India (AAI) chairman V P Agarwal for allegedly favouring a consortium of airport-lounge operators and a company that runs popular fast-food chains across the country in the contract for operating food and beverage services at the Chennai and Kolkata airports in 2012-13.
After three years of a preliminary enquiry into allegations of "cheating and gross misconduct", the Central Bureau of Investigation (CBI) has also booked then Member (Finance) S Suresh, then Executive Director R Bhandari, lounge operators Travel Food Services Chennai Private Limited and Travel Food Services Kolkata Private Limited, and Devyani International Limited, which runs several fast-food chains in India.
The questions sent to the companies remained unanswered.
The case concerns tenders for the master concessionaire contract for food and beverage services at the Chennai and Kolkata airports in 2012-13, officials said on Friday.
It is alleged that senior AAI officials engaged in gross misconduct, manipulated the tender process and made unauthorised changes to the terms and conditions of the master concessionaire contract in 2012-13 to favour the private parties.
The AAI had appointed IL&FS Infrastructure Development Corporation Limited (IIDC) as its consultant in August 2011 to help enhance non-aeronautical revenue, including earnings from food and beverage outlets, retail shops, advertising and car parking, at the Chennai and Kolkata airports.
Under the proposed master concessionaire model, a single agency would be awarded the contract to develop, operate and maintain all food and beverage outlets at each airport for 10 years to boost non-aeronautical revenue.
The CBI launched the enquiry in 2022 and submitted an extensive report material, suggesting cheating and a criminal conspiracy by public servants to extend undue benefits to private entities, prompting the agency to convert the enquiry into a formal case by filing an FIR.
The tender was a two-stage process. The first one was the Request for Qualification (RFQ) stage, with the shortlisted bidders moving to the finance stage in Request for Proposal (RFP).
According to the CBI, key terms in the RFQ were altered and conditions tweaked to favour certain companies at the RFP stage, and the minimum annual guarantee (MAG) was lowered and collusive bidding done by the two shortlisted bidders, who allegedly had conflicting interests.
The then Executive Director of the AAI, A K Mishra, had raised concerns about the collusive bidding and recommended recalling the tender with revised eligibility norms.
"However, the said apprehension was ignored deliberately by the accused public servants," the FIR says.
The FIR mentions the role of Amit Arora, who is under investigation in the Delhi excise policy case. However, he has not been named as an accused in this case.
"Amit Arora was also one of the prospective bidders at RFQ stage. On May 29, 2013, Amit Arora joined as Director of Devyani Airport Services (Mumbai) Pvt. Ltd, a subsidiary of Devyani International Ltd.
"The entity, Devyani Airport Services (Mumbai) Pvt. Ltd, was incorporated on April 18, 2013. Amit Arora got associated with one of the bidders, Devyani International Ltd, after RFQ stage but prior to RFP stage," the FIR has alleged.
The second shortlisted bidder was a consortium of Travel Food Services Private Limited and its subsidiary, Authentic Restaurants Private Limited.
"Amit Arora acquired 99.99 per cent shares of Authentic Restaurants Pvt. Ltd and had also joined it as Additional Director," the FIR has alleged.
The CBI said the bids of the two shortlisted contenders were "nearly same and just higher than the mandatory minimum annual guarantee", with the consortium emerging as the H-1 bidder.
The enquiry found that Arora had direct and indirect interests in both bidders, which should have led to their disqualification.
"But, the Master Concessionaire Contracts were awarded to newly formed companies ... and the shareholders in both the companies who participated in the bidding process were same," the agency said.
According to the FIR, the bidders failed to inform the AAI about the changes in the ownership and shareholding, violating the undertakings submitted at the RFQ stage and creating a conflict of interest.
The enquiry showed that the Commercial Advisory Board (CAB) of the AAI was given three separate options for fixing the MAG for the Kolkata and Chennai airports, but it chose the lowest of the three options for both airports.
"Enquiry revealed that MAG was to be decided in a rational manner to achieve
optimum revenue for AAI. However, the accused public servant, in criminal conspiracy with private persons, deliberately and in order to facilitate undue benefits, ignored the opinion of consultant and opted for much lower amount," the CBI has said.
All these changes helped the consortium of Travel Food Services Private Limited and Authentic Restaurants Private Limited, and Devyani International Limited to emerge as shortlisted and the only bidders at the RFQ stage for both airports.
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Jarkiholi is my colleague, don’t see us as enemies: DK Shivakumar
Bengaluru: Karnataka Deputy Chief Minister DK Shivakumar has stated that Satish Jarkiholi and he are colleagues and not enemies.
Speaking to presspersons here, Shivakumar questioned the media for portraying tension between the two leaders. “It is true that Satish Jarkiholi and I met at a wedding last night. We discussed the state and the party. Satish Jarkiholi and I are colleagues. Why do you see us as enemies?” he asked.
Shivakumar was responding to queries near the new Karnataka Industrial Areas Development Board (KIADB) office on Thursday.
When asked about Jarkiholi’s visit, he said, “We attend cabinet meetings in the afternoon, we meet for dinner, we meet for breakfast in the morning; these interactions are normal. In politics, friendship, relationships, and closeness always exist.”
He added, “Now, M.B. Patil and I spoke for about an hour about how to attract investors to the state, how Andhra Pradesh and Tamil Nadu are competing with us. A global conference will be held in Telangana soon, and we discussed how Karnataka should compete at the global level. It is natural to discuss the state’s progress this way.”
Speaking about the inauguration of the new KKRDB office, he said, “Businessmen in Karnataka should be respected. Their work should be facilitated, officers’ visits should be convenient, and files should be cleared quickly. The state government has built a new KKRDB office under the leadership of M.B. Patil. They had been in a rented building for so long; now they have their own office. It is close to Vidhana Soudha, bus and railway stations.”
When mediapersons asked about, leader of opposition, R. Ashoka’s comments regarding the Upalokayukta report that allegedly shows 63% corruption in the state, Shivakumar retorted, stating that, “It’s a pity that R. Ashoka doesn’t know the time period the report covers. Let him first read the report. Let him raise the issue in the session, and we will answer there.”
On whether a date has been fixed for the all-party delegation’s visit to Delhi, he said, “We still need to discuss it. The Union Minister said he is busy with the Parliament session, so we postponed the meeting scheduled for December 8. He had written a letter about this. The Prime Minister has a meeting with Prahlad Joshi. Nirmala Sitharaman has to introduce a bill that day. Somanna also said he will not be able to attend. A date will be fixed that is convenient for all of us.”
