Karnataka: BIAL comes under RTI, rules info panel

The Karnataka Information Commission (KIC) has ruled that the Bangalore International Airport Limited (BIAL), which operates the Kempegowda International Airport, is a public authority under the RTI Act, a major decision that brings to close a 15-year-old matter.

The order assumes significance as bringing transparency in management and operation of the BIAL helps in better understanding and accountability, especially in matters like levying of the contentious user development fee.

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In a strongly worded ruling, the KIC slammed the state government for its "utter failure" to assert the state's significant role in setting up the KIA.

The BIAL had moved the Karnataka High Court, challenging the KIC's 2008 order which directed the company to proactively disclose information under Section 4(1)(b) of the RTI Act, 2005. Last year, the high court remitted the case to commission, directing a fresh hearing.

The company has been arguing that 74 per cent of its equity was held by private companies and the state and the Centre owned the remaining 26 per cent, making it a private entity exempted from the RTI Act.

A full bench of KIC comprising Chief Election Commissioner N C Srinivasa and members S M Somashekara and K P Manjunath agreed that BIAL was a private company in terms of equity holding, but it also went into the details of funding by the government to underscore that the firm can't claim exemption from the RTI Act.

While the Act says that companies "substantially financed" by the government become public entities, the BIAL claimed that it is "not" substantially financed directly or indirectly by the state and the Centre.

The KIC relied on two authoritative Supreme Court judgements. In 2013, the apex court ruled that an institution or organisation, which is neither a 'State' (government) nor its instrument, can still be considered as public authority.

In the 2019 judgement, the court further explained that the word "substantial" financing doesn't necessarily have to mean more than 50 per cent (equity) and cited the land given for free or on heavy discount as means of indirect support.

The KIC pointed out that the Karnataka government had leased 4008.31 acres of land and gave Rs 350 crore as interest-free loan during the inception of the project besides Rs 50 crore in equity amount. The loan is repayable in instalments from the 11th financial year.

The BIAL argued that it had secured Rs 10,328 crore until February 2023 and the sums invested by the private promoters were far larger than the state loan. The BIAL further argued that the loans secured were against the "whole assets" and land had to be excluded.

The Infrastructure Department and the KSIIDC supported the BIAL's claim and added that BIAL would be cumulatively paying Rs 478 crore to the government for the first concession period of 30 years.

The KIC bench, however, noted that the private promoters did not offer any of their other properties except land and other assets belonging to BIAL while securing loans. "There is absolutely no material on record to show that some other assets/properties were also offered as security to banks. The airport is developed phase by phase. Hence, this land was the only major asset at its inception," it added.

The KIC slammed the government for supporting the company while suppressing its own contributions. "It is very shocking to know that the KSIIDC and the State of Karnataka have utterly failed to assert their role and support extended by them to the BIAL and virtually supported the contentions taken up by the BIAL in this case," it said.