Kerala businesses flay govt’s airport stance, support transfer to Adani

By: | Published: March 8, 2019 4:45 AM

Considering Kerala's high billing in world tourism charts and regular traffic from over 20 lakh expat families, the state's airports need to be competitive with Delhi or Bengaluru airports.

The Thiruvananthapuram International Airport is one of the five airports for which Adani has won the bid.

The business community in Kerala has upped the ante against the state government’s questioning of the Airports Authority of India (AAI)’s move to grant the rights of operation, management and development of the Thiruvananthapuram international airport to Adani Enterprises. Besides the state government moving the high court against the AAI, Kodiyeri Balakrishnan, state secretary of the CPI (M), on Wednesday said the Adani group should back out of the 50-year lease contract.

Within hours of the CPI(M) top brass’s statement, as many as 35 assorted industry and trade organisations, including CII and G-Tech ( Group of Technopark companies), have come together to place a front-page ad on a leading Malayalam daily on Thursday, unequivocally dubbing “the airport privatisation” allegation as a “myth”. The undersigned for the ad is an apex outfit of various trade organisations that calls itself ‘Awake Trivandrum’.

The bid of the state government’s KSIDC (fee of Rs 135/passenger) was far behind the bid of Adani Enterprises (that quoted Rs 168) in the tenders. The Thiruvananthapuram International Airport is one of the five airports for which Adani has won the bid.

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“A private investor brings fresh capital to expand the facilities and flights, so that the passenger revenues will grow and even the places around the airport will indirectly benefit. When a state undertakes a service industry, historically, it is likely to go on loss,” says the ad. It goes on “to request the Kerala government to utilise the opportunity in the best manner”.

Balakrishnan on Wednesday argued that the Kerala government, which gave 635 acre free to the airport, should be allowed to run it. He expressed fears that since Adani Group is building a deep sea port at Vizhinjam nearby, they might convert the Trivandrum airport into a cargo airport.

“It is indeed no positive signal that the state government is contesting infrastructure investors in the state,” P Ganesh, former chairman, CII State Council, told FE. “The airport is in sore need of expansion and an operator can effectively market it and ramp up the flight connectivity. If Adani Group can address it, why not?” he asks.

Considering Kerala’s high billing in world tourism charts and regular traffic from over 20 lakh expat families, the state’s airports need to be competitive with Delhi or Bengaluru airports.

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Shashi Tharoor, MP, had earlier opined that if the bid was won by the KSIDC and later transferred to CIAL, the entity that runs the Kochi airport, this could result in “a very damaging conflict of interest”. He had suggested that the state government could engage all stakeholders more amicably.

Last week, the state government had moved a petition at the Kerala High Court, pleading that it had paid Rs 324 crore in compensation for the land acquired for the development of Thiruvananthapuram airport and if the airport is privatised, the government is entitled to have this amount treated as its equity.

“In fact, this is no privatisation issue,” says PH Kurian, former additional chief secretary of Kerala. “Adani has picked up only the operation and management lease contract. And even if it is privatisation, it would be dead against the spirit of investment promotion to derate the investor,” quips Kurian, who headed the state’s investment promotion machinery for decades.

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