The Central Bureau of Investigation (CBI) has filed a formal corruption case against former Airports Authority of India (AAI) chairman V. P. Agarwal, accusing him of playing a key role in manipulating the contract process for food and beverage (F&B) services at the Chennai and Kolkata airports during 2012–13. The case marks a major development after nearly three years of a detailed preliminary enquiry into allegations of cheating, undue favouritism and gross misconduct involving top AAI officials and prominent private companies.

Along with Agarwal, the CBI has booked former AAI Member S. Suresh, former Executive Director R. Bhandari, and several private operators, including Travel Food Services (TFS) Chennai Pvt. Ltd., Travel Food Services Kolkata Pvt. Ltd., and Devyani International Limited. Devyani International is a widely recognised operator of major fast-food chains across India. The investigation points toward a broader conspiracy in the awarding of lucrative F&B concessionaire contracts at two major airports.

According to CBI officials, the alleged irregularities pertain to tenders floated under the Master Concessionaire model for managing airport F&B services. This model consolidates all food and beverage outlets under a single agency for each airport for a period of ten years. The aim, as envisioned by the AAI at the time, was to increase non-aeronautical revenue at major airports through uniformity, professional management and improved passenger experience.

The AAI had hired IL&FS Infrastructure Development Corporation Limited in August 2011 to advise on boosting non-aeronautical income, including profit streams from F&B stalls, retail spaces, advertising and parking facilities at both airports. IL&FS was expected to provide an objective framework to maximise revenue while ensuring fair competition among bidders. However, the CBI alleges that the process that followed deviated sharply from this objective.

The tendering process consisted of two stages: first, the Request for Qualification (RFQ) round to shortlist technically eligible bidders, and subsequently the Request for Proposal (RFP) round wherein the financial bids of shortlisted entities would be evaluated. According to the FIR, the CBI found that key terms in the RFQ were modified and specific conditions were altered at the RFP stage in a manner that unfairly favoured a limited set of private companies.

A major finding involves allegations of collusive bidding. The enquiry indicates that the two shortlisted bidders not only submitted suspiciously similar bids but were later found to have shared conflicting business interests. This would normally merit immediate disqualification due to conflict-of-interest concerns.

One of the most significant concerns came from within the AAI itself. A. K. Mishra, then Executive Director, reportedly flagged troubling signs of collusion and strongly recommended scrapping the tender and reissuing it with revised eligibility criteria. However, according to the FIR, this recommendation was deliberately ignored by the accused officials, suggesting a systematic attempt to bypass internal checks in favour of certain bidders.

The CBI’s preliminary enquiry, initiated in 2022, uncovered substantial evidence indicating a criminal conspiracy between public servants and private entities. The probe found material suggesting that the bidding process was manipulated, the minimum annual guarantee (MAG) was deliberately lowered, and private parties were extended undue benefits through unauthorised contractual changes. Based on these findings, the agency transitioned the enquiry into a full-fledged First Information Report (FIR), signalling the seriousness of the offences suspected.

A critical aspect of the CBI’s findings concerns Amit Arora, a businessman already under investigation in the Delhi excise policy case. Although Arora has not been named an accused in this FIR, the CBI has detailed his involvement in the airport tender process. Arora was among the prospective bidders during the RFQ stage. By May 2013, he had joined Devyani Airport Services Pvt. Ltd.—a subsidiary of Devyani International Limited—as a Director. Notably, the company itself was incorporated only in April 2013, raising questions about the timing of his association.

Further investigation revealed that Arora acquired 99.99 per cent of the shares of Authentic Restaurants Pvt. Ltd., a subsidiary of Travel Food Services and part of the consortium that formed the other shortlisted bidder. The CBI states that Arora’s simultaneous involvement with both shortlisted entities constituted a major conflict of interest that should have automatically barred both companies from proceeding to the financial bid stage. Instead, the process continued unimpeded, allowing the consortium to emerge as the highest (H-1) bidder.

The agency also alleges that the shortlisted bidders did not disclose significant changes in their ownership and shareholding patterns to the AAI, a violation of declarations made during the RFQ stage. The FIR notes that such non-disclosures breached the integrity of the bidding process and created conditions ripe for conflict of interest. Despite these red flags, contracts were awarded to newly formed companies whose shareholders overlapped with those who had participated in the tender as separate entities.

Another area of concern in the FIR relates to how the MAG—the minimum annual revenue payable to AAI by the concessionaire—was determined. The AAI’s Commercial Advisory Board was presented with three separate options for fixing the MAG for both airports. However, it chose the lowest revenue option for each, contrary to the consultant’s advice to adopt a rational, revenue-maximising approach. The CBI alleges that this decision, too, was influenced by conspiracy between public officials and private bidders, enabling the latter to secure high-value contracts at significantly reduced financial commitments.

In its broader assessment, the CBI concludes that the manipulated tender conditions, undisclosed ownership overlaps, and disregard for internal objections cumulatively enabled the accused private parties to emerge as the only shortlisted bidders at the RFQ stage for both airports. With limited competition and a tailored tender structure, the contract awards became merely procedural formalities.

The companies named in the FIR did not respond to queries regarding the allegations. Meanwhile, the CBI continues to probe the extent of the conspiracy, including whether additional individuals or entities may have been involved in influencing the bidding process or benefiting from the altered terms.

The corruption case marks one of the notable investigations into the functioning of non-aeronautical revenue streams at major Indian airports. As the matter evolves, more details are expected to emerge on how the alleged manipulation impacted AAI revenues and the extent of collusion between officials and private concessionaires.