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Why Kerala is up in arms over Adani Group bagging bid to run Trivandrum airport   

The Ahmedabad-based group winning the bid has united both the ruling LDF & opposition UDF for a host of reasons. 

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Kochi: The discourse over Adani Enterprises securing a 50-year lease to operate, manage and develop the 88-year-old Trivandrum International Airport, or Thiruvananthapuram airport, reached a crescendo in Kerala Thursday, a day after the Union Cabinet took the decision Wednesday. 

Not surprisingly, there is no such din over the Adani Group’s successful bids for the Jaipur and Guwahati airports.

The issue has united political parties in the state, barring the BJP, for a variety of reasons — an inherent opposition to privatisation, the perception of Adani being a stooge of the Modi government, and added to it a dash of ethnocentricity over Adani the “outsider”. 

The Adani bid has now brought the CPI(M)-led Left Democratic Front (LDF) government in direct conflict with the Modi dispensation. Chief Minister Pinarayi Vijayan Wednesday wrote to Prime Minister Narendra Modi, urging the Centre to reconsider its decision. 

Why is the state government opposed to the Adani bid? 

The LDF government’s chief contention is that it had wanted to run the airport. 

Adani Enterprises won the bid riding on the highest per passenger fee of Rs 168 to the Airport Authority of India (AAI), while its nearest competitor, the state-owned Kerala State Industries Development Corporation (KSIDC), offered Rs 135 and GMR Airport fell way behind with an offer of Rs 63 per passenger.

But in his letter Wednesday, the chief minister claimed that the central government had assured Kerala that when a private player is involved, the state’s contributions to the development of Trivandrum airport would be factored in. 

According to the chief minister, the Kerala government had handed over 23.57 acres of land, free of cost, to AAI in 2005, on the grounds that the land value would be reflected as the state’s share capital in a Special Purpose Vehicle (SPV). The land was meant for the international terminal. 

The chief minister’s letter also states that Kerala has time and again asked for the airport’s operations and management to be transferred to an SPV, in which the state government is the majority stakeholder.

While reiterating the state government’s claim for equity in exchange of additional land acquired, the CM ended the letter on a cautionary note: “In view of the unilateral decision taken by the Government of India, without giving credence to the cogent arguments put forward by the state government, it will be difficult for us to offer co-operation to the implementation of the decision, which is against the wishes of the people of the state.”

LDF leaders are also alleging corruption behind the deal to privatise an airport that they claim made an annual profit of around Rs 170 crore. With the airport going to the same business group from Gujarat as the one developing the Vizhinjam International Seaport, located nearby, there is no dearth of conspiracy theories.


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What has been the Modi government’s counter? 

The Modi government’s response has been quick. Union Aviation Minister Hardeep Puri Thursday tweeted “facts” to insist that the Kerala government didn’t qualify in the bidding process, which he added was held in the most transparent manner. 

Puri tweeted that the Kerala government decided to participate in the bidding process but had requested that it be given the Right of First Refusal (RoFR), which he added was agreed upon.

He added that it was stipulated that if the KSIDC bid comes within “10 per cent range of the winning bid”,  then it would be awarded the work. According to the minister, when bids were open, the Adani Group offered AAI Rs 168 per passenger while KSIDC offered Rs 135 — a difference of 19.64 per cent.  

 

Union Minister of State for External Affairs, V. Muraleedharan, who hails from Kerala, addressed the regional media from Delhi on the issue. 

“The state government, by agreeing to opt for the first right of refusal, had agreed to become a part and parcel of the final outcome,” he said. “The state government also could not manage to get a stay in the legal battle it waged against the privatisation bid. The state government and the UDF had no qualms about taking the PPP route first with CIAL and more recently with Kannur International Airport.”

The Modi government also found an unlikely ally — senior Congress leader Shashi Tharoor, who is the Trivandrum MP. 

Tharoor said the chief minister had no grounds to say the state would not cooperate if the Centre goes ahead with Adani Enterprises. 

“He cannot say that. The people of Thiruvananthapuram need development and nobody can stand in its way,” Tharoor said. “This company has won the global tender for the airport. It does not matter if it is Adani or Ravi Pillai or Yusuff Ali, but the state capital deserved a better airport. The ensuing benefits would accrue to the people of the city and its hinterland.” 

He also tweeted in favour of Puri. 

 

Why is the opposition in Kerala backing the government? 

Tharoor’s stand, however, is at odds with his own party, the Congress, the principal opposition in the state. The Congress-led United Democratic Front (UDF) has decided to back the government on the issue. 

For one, both the LDF and the UDF see a common enemy in the BJP-led National Democratic Alliance (NDA) government. 

The Congress leadership also maintains that the party’s position is that it is very much against privatisation, with opposition leader Ramesh Chennithala, KPCC president Mullapalli Ramachandran and former chief minister Oommen Chandy saying as much in different words. 

“The Union Government’s decision to award operations of Trivandrum Airport to Adani Group on a 50-year-lease amidst the COVID crisis is a deplorable move. The airport is the state’s property, and must not be privatised,” Chennithala tweeted.

“The decision to go for PPP mode despite state govt’s readiness to operate and manage the airport shows how Central Govt is trying to use the COVID pandemic to hand over all PSUs to private sector,” he added. 

 

What is the significance of Trivandrum airport?

The Trivandrum airport is 88 years old and its international terminal could end up as a major travel hub not only for the southern parts of Kerala but also the southern parts of Tamil Nadu, which are bereft of air connectivity. 

Kerala’s other three airports are in Cochin, Calicut, Kannur — all international — but they are in the central and northern parts of the state. Of these, Cochin and Kannur are run in the PPP format, with the Kerala government as a stakeholder. 

LDF leaders also claim that the airport made a profit of Rs 170 crore in the last fiscal year.

The business community, however, is quick to point out that the profits came from a stiff user fee charged by Trivandrum, leading to tariffs way higher than in other airports.

“The passengers are looking for amenities that are at least comparable with what other airports provide. Can you blame international passengers from shunning Trivandrum where the Duty Free shop has been dysfunctional for over two years?” said a businessman who keeps a busy international calendar but prefers to travel via Kochi. “I am not speaking against the state but in the interest of people who invariably pay more for lesser facilities in Trivandrum.” 


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Can AAI go ahead with the lease, given the LDF opposition?

There is no real clarity on when the Adani Group can take over the airport as it is facing a string of hurdles. 

For one, the group has to finalise the state support agreement (SSA) with the LDF government before it can take over operations at the airport. Given the state government’s stand, the business group will have its task cut out.  

Then there is the litigation. The Supreme Court had in February sent back to the Kerala High Court the petitions by the state government and airport employees union (AAEU) challenging AAI’s decision to hand over the airport to the Adani group. 

The matter is sub-judice.  


Also read: Mother was Covid-free when she died — MP Alphons after row over her ‘public funeral’ in Kerala


 

 

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5 COMMENTS

  1. Title of this article says Why . . This has not been answered. Article merely reiterates what we know already, leaving the question why .

  2. This is kerala – not Australia. We know what to do.
    We already manage 2 big airports in Kochi and kannur.

  3. KSIDC lost the bid.
    Tharoor confirmed what Puri said.
    Govts are not best parties to run airport services well. Better to run it professionally by a private bidder.
    Why not?
    People of Trivandrum elected Tharoor, don’t forget that.

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