Kerala has four international airports, all of which are international airports. The Kerala Government has a 30% stake in Kannur Airport and another 32% in Kochi Airport. Almost 70% of these airports are in private hands. So why does the government oppose privatization of the under-performing Thiruvananthapuram (Trivandrum) airport?
The central government proposed privatisation of operations, management and development of six airports in Bharat through Public-Private Partnership model (PPP) way back in 2018. This included the Thiruvananthapuram Airport which the communist Government of Kerala (GoK) immediately opposed and proposed a Special Purpose Vehicle (SPV) whereby a state entity called Kerala State Industrial Development Corporation Ltd. (KSIDC) would also participate in the open bid process.
The centre agreed and even agreed to a Right of First Refusal (ROFR) to the SPV of GoK. The terms of the ROFR were pretty straight forward. The GoK would be awarded the operations of the airport if its bid comes within 10% of the winning bid. That someone else came forward to participate in such a lop sided bid is in itself astonishing considering the cut throat competition that exists in the airline industry.
Another contentious issue which started the clamour for privatisation was the steep user fee being levied by Thiruvananthapuram airport. In other airports of Kerala, it is around Rs.500/- per passenger while in Thiruvananthapuram it is a whopping Rs.1069/- per passenger. Thiruvananthapuram Airport was not able to justify the high fees when facilities at other airports were far better than theirs. Many low budget airlines including Fly Dubai, Saudi Airlines, Jet Airways and Spice Jet had stopped flying citing high user fees at Thiruvananthapuram. It was under this background that the cries for privatization originally began.
Airports in Kerala have come under severe criticism in the recent past for all the wrong and dubious reasons.
Kerala recently witnessed a plane crash at the Kozhikode Karipur airport (which is actually located in Malappuram district) which killed 19, including the pilot and co pilot. Even after two weeks of the accident, around 61 are still hospitalized with 11 of them in critical condition. An inquiry has been initiated since the block boxes have been recovered, but the time frame of five months to complete the same seems absurd. Heavy rains, wet runway, poor visibility and aquaplaning all are being blamed as possible causes. Being a table top runway with barely enough runway end safety area, once the plane overshot the runway there was no turning back.
The other was a massive gold smuggling scandal which used the Thiruvananthapuram airport as its base of operations. Many close to the chief minister himself have already been implicated, and many others are cooling their heels in various jails across the state. It is also alleged that the Chief Minister himself is involved with the mafia as was evident from the FIR submitted by the Enforcement Directorate. Various law enforcement agencies are probing the same, including the Enforcement Directorate (ED), Customs Department and the National Investigation Agency (NIA).
Under these circumstances, it was only natural for the central government to go ahead with the privatization plans asap. On 19th August 2020, the Union Cabinet approved the proposal to lease out the Thiruvananthapuram airport to M/s Adani Enterprises Ltd.
Ahmedabad based Adani group came forward with a winning bid of Rs. 168, which is the highest amount per passenger (which is payable to the Government) against KSIDC who quoted Rs.135/- The difference of 19.64% was evident to all to see and yet the GoK have now approached the Supreme Court. All this was done and dusted in February of 2020. Pinarayi Vijayan has now shot off a letter to the Prime Minister threatening GoK non cooperation in the implementation of this decision. It is alleged that this is just a delaying tactic on the part of the GoK and that the CPM is trying to divert attention from the gold smuggling scandal.
The Indian National Congress on its part seem rudderless and are as yet undecided on the matter. Multiple leaders came out blaming all and sundry. But the local Member of Parliament (MP) from Trivandrum Shashi Tharoor openly came out in support of the Adani PPP deal. He blamed the state government for the long delay in development of the airport and also reiterated the wishes of his voters who have long waited for a world class airport. The CPM leaders as usual blamed Tharoor for being pro rich, conveniently forgetting the fact that Adani is also entrusted with building the Vizhinjam International Seaport in Thiruvananthapuram.
The port is a massive project being build on the PPP model, costing around 7,500 crores. This would pale in comparison to the airport project which would come to a couple of hundred crores. The Vizhinjam project was also opposed by the CPM when they were in opposition but was agreed to once Pinarayi Vijayan came to power. Those who had earlier opposed the deal suddenly changed their mind once a meeting between Karan Adani, the CEO of Adani Ports, and Pinarayi took place. There were allegations of massive kick backs without which the future of such projects in Kerala would just not materialise.
Many feel that the recent opposition to the airport PPP is just another tactic to bring out the red bucket for which the party is famous for at the expense of the common man. There are also allegations that Pinarayi is trying to destroy the Thiruvananthapuram Airport to promote the proposed airport near Sabarimala which he is trying to build on land allegedly encroached by KC Yohannan (Believers Church) owned Cheruvally Estate. Others allege that Pinarayi wants control of the airport to facilitate free movement of gold from the gulf countries using just his influence.
The ball is now in the central government`s court and how they play it will now decide the fate of the privatization drive envisaged by the central leaders.
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