The matter of privatization of Trivandrum airport takes another turn when Kerala Chief Minister (CM) Pinarayi Vijayan said in the assembly that he would continue to defend Central Government’s move to hand over the airport to private parties. CM added that he would raise the issue with Prime Minister Narendra Modi during the NITI Ayog meeting on 15 June 2019.
“The airport rightfully belongs to Kerala, and it is not going from our hands,” CM said. “There is a NITI Ayog meeting in Delhi on 15 June 2019. I intend to meet the PM in person and once again put forth our case before him,” he added.
Adani Group won the bid to operate five out of six airports – Ahmedabad, Lucknow, Jaipur, Guwahati, Trivandrum and Mangalore – for privatization by the Central Government. The Group gets the right to upgrade and operate airports for 50 years.
Kerala State Industrial Development Corporation (KSIDC) also participated in the bid back then and sought the right of the first refusal*. A bid difference of 10% was granted, which implies that KSIDC would get preference if the winning bid is only 10% higher.
Adani’s quoted INR 168 per passenger fee, which is 25% higher. KSIDC quoted INR 135. KSIDC’s bid was reasonably competitive compared to GMR that operates Delhi and Hyderabad airports that quoted INR 63.
After Adani won the bid, KSIDC approached the High Court challenging Airport Authority of India’s (AAI’s) decision to bring private parties to run Trivandrum airport. KSIDC stated that the decision to allow privatization goes against the public interest. Kerala Chief Minister too wrote to PM saying that there is a growing public resentment against the privatization of Trivandrum airport and the State Government cannot back a private agency. The Kerala High Court in an interim verdict has said that the bid shall be awarded only as per the final judgment of the court.
Chief Minister also pointed out that Adani Group lacked any prior experience in airport development. He said that the tender document did not seek the previous experience of the bidders, which itself is dubious. Adani Group won six bids, making the entire bid suspicious.
Kerala Government also raised its experience in running international airport by itself. The United States recognized the development and management of Cochin Airport. The State recently started operating Kannur International Airport as well.
Trivandrum airport is the oldest airport in the State. It was established in 1932 after the erstwhile Travancore Kingdom granted 258.06 acres of land for the airport. After independence, the State Government gave more land for airport expansion. Currently, there is an ongoing process to acquire 18 acres of land for the modernization of the airport. AAI has only 0.05756 hectares out of the total extent of 636.57 acres of land are under its ownership.
*Right of first refusal gives a potentially interested party the right to buy a property before the seller negotiates any other offers.
