Wednesday, September 24, 2008

Kerala Govt to float company for Kannur Airport

The Government of Kerala is in the process of floating a company for the development of Kannur Airport. The airport will be developed on a Public-Private-Partnership (PPP) basis. Currently, the government is in the process of identifying strategic partners for the development. The partners will then be made a part of the Joint Venture company. It has identified about 2,000 acres for the development of the airport and is in the process of completing the final processes of acquisition. The proposal for development of the airport received an ‘in principle’ clearance from the Central Government in February this year.

The government will own 26 per cent of the project while the rest will be owned by the strategic partner of the company or a consortium who will be selected through a bidding process. Speaking exclusively with TravelBiz Monitor, V Thulasidas, Special Officer, Kannur Airport said, “We plan to complete the land acquisition process and the registration of the company by January 2009. Post this, the government will initiate the bidding process for private partners.” The airport built on a Build-Own-Operate (BOO) model and will be developed by the private partner. Details on the structure and requirements of the airport will be decided by the government in discussion with the interested parties in the pre – bid conference, informed Thulasidas. The government is currently in the process of appointing consultants for assisting the project. C P Krishnan Nair, Chairman, Hotel Leelaventure Limited, confirmed the Expression of Interest of Hotel Leelaventure Limited to the Kerala state government to develop the Kannur Airport.

The 2,000-acre plot will consist of the airport and other non-aeronautical business projects to be decided by the private partner. “Possible avenues of earning like the Maintenance, Repair and Overhaul (MRO) facility will be considered by the state government and the partner. However, the break even will decide on the implementation of the additional facilities,” stated Deepak Shastri, Airport Director, Calicut International Airport. The additional facilities are expected to be developed in phases. “The government will be able to elaborate on the non-aeronautical business projects for the airport by mid-2009,” stated Dr Venu V, Secretary, Kerala Tourism. “Etihad Airways has expressed interest to develop MRO facility along with gaining equity participation at the Kannur Airport. The approval will be dependent on the bidding process,” added Shastri.

With the Kerala government keen to develop North Kerala as a tourism circuit, its move to fast track the process of development of the Kannur Airport will be considered an effective move in that direction. Hotel Leelaventure’s interest in the project also comes in tune with the development of the Group’s hotel at Lake District along with a catering school.

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