Tharoor believes Adani Group’s significant experience in the logistics and infrastructure business is likely to be of value.

Tpuram airport to benefit from commercially-motivated private operator Tharoor to TNM
news Controversy Monday, March 04, 2019 - 17:46

As the debate on the privatization of the Thiruvananthapuram airport rages on, the Kerala government is not backing down to gain control over the airport. The government claims that it is in the interest of the state that the operations and management of the airport be given to the Kerala State Industrial Development Corporation (KSIDC). In CM Pinarayi Vijayan’s opinion, Adani Enterprises Limited, which won the bid for the airport, has no prior experience in running an airport. He claims that the businessman's proximity to PM Modi has ensured he won 5 out of the 6 airports being privatized.

But Shashi Tharoor, Congress MP of Thiruvananthapuram feels that the airport urgently needs expansion and a commercially-motivated private operator is what the state may need to improve flight connectivity and facilities at the airport.

In a conversation with TNM, Tharoor argues that KSIDC which lost the bid, has no previous airport operation experience and that it is more likely that a private operator, whose commercial interests are more aligned with those of its users, will be far better motivated to maximize the potential of the airport than a public sector entity with no discernible strategy or sense of priority for one city over another.

Tharoor says that the state government should rather focus more on the economic development of the capital city and the surrounding region, as well as employment generation in the state.

How do you think the CM can address the issue through what you called 'constructive compromise’? 

By engaging all stakeholders. He is in a good position to ensure that the state government gets a good equity stake in the airport reflecting the value of the land. This would enable the government to ensure that neither the public interest nor the interests of employees, people living in the neighbourhood etc., are neglected as we go forward. 

For many people, the privatisation move is welcome because it is clear that the Trivandrum airport urgently needs expansion and a capable operator that will forcefully market it with airlines in order to increase flight connectivity. In this regard, a commercially-motivated private operator could prove more aligned with the interests of passengers and the business community in Trivandrum in terms of improving flight connectivity and facilities at the airport. My own efforts with airlines to enhance flights to Trivandrum have had less than adequate support from the state government. That may be because they have equal interest in all of Kerala's airports, but it does mean that Trivandrum is not getting the attention it needs.

While the state government has the right to have a say in the operation of the airport, the ideal mechanism could be via seeking a minority stake in lieu of land acquisition and infrastructure development related to the airport. 

The clear focus of the state government should be on the economic development of the capital city and the surrounding region, as well as employment generation in the state -- which is best served by a vibrant airport that’s able to compete with the best in the country, and can thus facilitate key industries like IT and tourism, which account for hundreds of thousands of jobs in southern Kerala alone. 

What about the fact that Adani has no experience in building airports? Isn't that a valid concern for Pinarayi?

I hold no special brief for Adani, but the fact is that they have won the bid under the terms set by the Government of India. My expectation is that it’s likely that the Adani Group will rope in a capable operating partner and/or form a team of highly experienced management personnel, for the airports that it has won in the recent bid, including Trivandrum. This was the model followed by airport pioneers GMR and GVK in the initial stages of operations at the Delhi and Mumbai airports, while foreign partners were involved in the development and operations of the Bangalore and Hyderabad airports as well. Today these airports have demonstrated remarkable growth in traffic volumes and are ranked amongst the best in the world in terms of quality of service and facilities. 

The Adani Group has significant experience in the logistics and infrastructure business, and this is likely to be of value as well. 

It is a little ironic for the state to criticize the winning bidder’s lack of demonstrated airport operation capability when its own bid was made by agencies without any connection whatsoever to the airport business -- including the state’s electricity utility company.

Likewise, the state itself had gone in for the Cochin airport project with absolutely zero experience in airport operation. Despite being still not comparable in quality of facilities or operations with the truly private airports such as Delhi or Bangalore, CIAL did find its footing pretty quickly. 

Do you believe that an airport built under PPP model with Adani will be a better option for the state as against an airport that can be built through the company floated by KSIDC?

As mentioned previously, KSIDC has no airport operation experience whatsoever nor much demonstrated success in handling large transportation infrastructure projects. Likewise, it is more likely that a private operator, whose commercial interests are more aligned with those of its users, will be far better motivated to maximize the potential of the airport than a public sector entity with no discernible strategy or sense of priority for one city over another. Handing the airport to KSIDC is unlikely to bring more efficient and effective management than was the case with AAI, whereas the latter at least has decades of airport management experience. 

It has also been feared by many stakeholders of the Trivandrum airport, including many members of the general public, that a bid won by KSIDC will result in the handing over of the airport to CIAL, an entity that is quite unlikely to have a benevolent outlook towards its most direct competitor. This will invariably result in a very damaging conflict of interest and would be opposed by the many users of the Trivandrum airport. 

Also read: Explained: Why the Pinarayi Vijayan govt in Kerala is taking on Adani over an airport

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