Thiruvananthapuram airport privatisation: Hardeep Singh Puri says Kerala already running two airports under PPP model

The Kerala government is running two "very successful" airports under the public-private partnership (PPP) model and it is still opposing handing over the Thiruvananthapuram airport to a private operator, Civil Aviation Minister Hardeep Singh Puri said on Friday.

His remarks come after Kerala Chief Minister Pinarayi Vijayan wrote a letter to Prime Minister Narendra Modi opposing the Union Cabinet's approval to lease out the Thiruvananthapuram airport to Adani Enterprises under the PPP model for a period of 50 years.

Puri asked why did the Kerala government participate in the bidding process for the Thiruvananthapuram airport if it has been against privatisation.

"Kerala is the pioneer as far as airports under PPP are concerned. First PPP airport in India came up in Kochi in Kerala,” Puri tweeted.

The Kochi airport "is a successfully run airport" that handled 9.62 million passengers per annum in 2019-20 before COVID-19, he noted.

"In fact, it was during the UDF (Congress-led coalition) regime in Kerala that the foundation for Kochi airport was laid in 1994 and the airport was inaugurated in 1999 during LDF (Left-led coalition) regime," he said in a tweet.

Another very successful example of an airport operating in PPP mode is in Kannur, also situated in Kerala, he said.

"Now, Kerala Government, running two very successful airports in PPP mode, is opposing the handing over of Thiruvananthapuram airport under PPP mode," he said.

"It has come to my knowledge that an all-party meeting in Kerala has opposed the PPP model at Thiruvananthapuram airport," Puri said.

The minister said the airports in Delhi and Mumbai which handle around one-third of India's air passenger traffic were privatised using the PPP model during the first term of the Congress-led United Progressive Alliance (UPA) government in 2006-07.

"In comparison the 6 airports now being handed over, only handle less than 10% of the country's total passenger traffic," Puri mentioned.

Adani Enterprises had won the rights to run six airports - Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati - through the PPP model after a competitive bidding process in February 2019.

In July 2019, the Union Cabinet had approved the proposal for leasing out three airports - Ahmedabad, Mangaluru and Lucknow - to Adani Enterprises.

On Wednesday, the Union Cabinet approved the proposal for leasing out the other three airports.

"If Kerala Govt is against privatisation, then why did it participate in the bidding process? State Govt was given a fair chance & Right of First Refusal (RoFR) if their bid was within 10% below the range of highest bid. However, they bid 19.64 % below," Puri tweeted.

After losing the bid for the airport, the Kerala government then approached the Kerala High Court on this matter which dismissed the petition in December 2019, Puri noted.

"Petitioners then filed a SLP (special leave petition) in Hon'ble SC. Apex Court remitted the matter back to Hon'ble Kerala High Court. There is no stay in the case either by Hon'ble SC or Hon'ble Kerala High Court," he said.

The Union Cabinet has given its go-ahead for awarding the Thiruvananthapuram airport to the private party subject to the outcome of writ petition and in accordance with provisions of undertaking given by that party, he said.

"If the petitioners succeed and the outcome of litigation leads to annulment/cancellation of the bidding process then the Concessionaire will hand over the possession of the airport to AAI," the minister mentioned.

"They will be entitled to a refund of the amount paid to AAI and additional investments made in the assets," he said, adding that Adani Enterprises "will also not demand any damages from AAI".

The Centre-run Airports Authority of India (AAI) owns and manages more than 100 airports, including the one in Kerala's capital city.

Mullappally Ramachandran, the president of Kerala Pradesh Congress Committee, had said on Thursday that the move to privatise the Thiruvananthapuram airport was "deplorable".

In his letter, the Kerala CM has asked Modi to reconsider the decision as it will be "difficult" for the state to cooperate.

Kerala's repeated requests to entrust the airport management with the special purpose vehicle (SPV) in which the state government is the major stakeholder was also ignored, Vijayan stated.

"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 cooperation to the implementation of the decision, which is against the wishes of the people of the State," he said in the letter.