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Thiruvananthapuram airport privatisation: With state government against the move, Adani faces delay

State Chief Minister Pinarayi Vijayan shot off a letter to Prime Minister Narendra Modi on Wednesday, soon after the Cabinet approved leasing of the airport to Adani

August 21, 2020 / 04:58 PM IST

Privatisation of the Thiruvanathapuram airport is snowballing into a conflict with multiple layers.

First is the conflict between the state an the Centre. Soon after the Union Cabinet cleared a proposal on August 19 to lease out three airports, including in Thiruvananthapuram, state Chief Minister Pinarayi Vijayan shot off a letter to Prime Minister Narendra Modi saying the move was "against the wishes of people."

The three airports, also including Jaipur and Guwahati, are currently run by the Airports Authority of India and have been leased out to the Adani Group.

Disapproving of the move,  Vijayan in his letter said that the Centre ignored repeated requests from Kerala for entrusting the airport to a special purpose vehicle, with the state as a major stakeholder. Pointing out that litigation on the matter is pending before the Kerala High court, the Chief Minister said, "It will be difficult for Kerala to offer cooperation for implementation of decision."

Later on August 20, the state's Finance Minister, Thomas Issac tweeted:

Close

But the LDF government in Kerala may not get any support on the issue, with Congress MP from Thiruvananthapuram, Shashi Tharoor saying that the PPP model may be the best suited for developing the airport. Congress (I) is also part of the Opposition UDF in Kerala.

"The people of Thiruvananthapuram want a first-class airport worthy of the city's history, status, and potential. In this context, a decision, however controversial, is preferable to the long delay we have suffered," the Congress leader tweeted.

"The reality is that a private entity running the operations competitively is the only way this airport could flourish. Whoever it is, the ownership of land and airport as well as the responsibilities of ATC, Security, Customs and Immigration still remains with the Government agencies," he added.

The three are part of the six airports for which Adani Group had won bids in 2019. The other three are, Lucknow, Ahmedabad and Mangaluru. Earlier this year in February, the Group had signed the concessionaire agreement to start operations in Mangaluru, Ahmedabad and Lucknow airports.

Overall, the Modi government plans to put about 35 airports on the PPP model, over the next five years.

Aviation minister weighs in

Later in the day, Aviation Minister Hardeep Singh Puri joined the debate, by point out that the Kerala State Industrial Development Corporation, or KSIDC, had participated in the bids, but came second.

"It was stipulated that if the Kerala State Industrial Development Corporation (KSIDC) bid comes within the 10% range of the winning bid, they would be awarded the work. There was a difference of 19.64 percent between them and the next bidder when bids were open," Puri said.

He added:

"Winning bid quoted ₹168 per passenger, KSIDC quoted ₹135 per passenger & third qualifying bidder was at ₹63 per passenger. Thus, despite special provision of RoFR being given to GoK, they could not qualify in international bidding process carried out in a transparent manner."

The hurdles

The Kerala government had taken the matter to the Supreme Court, which earlier this year had sent the petitions back to the state High Court. Apart from the state, the airport employees union had also filed a petition against the PPP move.

While the case continues to drag along in the High Court, which has been unable to take it up because of the COVID-19 disruption, it is unlikely that the Adani Group will be able to run the airport without the state's co-opearation.

As Tharoor had pointed out, some of the critical functions within an airport is handled by the state.
Moneycontrol News
first published: Aug 20, 2020 12:02 pm
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