ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Why Is Government’s Stance Crucial?

Thiruvananthapuram Airport Controversy

The article investigates the ongoing tussle between the central government and the Government of Kerala regarding the leasing of the Thiruvananthapuram airport to the private sector. It traces the genesis of the problem and the rationale of the state government demand for a role in the management of the airport.

Despite the central government’s auctioning away of the country’s major ­air­ports and Adani Enterprises cornering most of them, Kerala has refused to roll out the red carpet for the corporate giant that secured the lease for the Thiruvananthapuram airport. More than that, as Adani Enterprises is heading towards taking control of the Thiruvananthapuram airport along with five other airports in the country (Mangaluru, Jaipur, Ahmedabad, Lucknow and Guwahati), the Government of Kerala (GoK), in alliance with the opposition political parties, has challenged the claims made by the supporters of privatisation and the central government on the grounds of violation of social, economic, business, and judicial wisdom. It was in February 2019 that the union cabinet approved the proposal for leasing out three airports, namely Jaipur, Guwahati and Thiruvananthapuram—all these fully owned by the Airports Auth­ority of ­India (AAI) and making profits. Thiruvananthapuram airport, for ins­tance, has been consistently scaling up its profits which was `169.32 crore in 2017–18 and `179.63 crore in 2018–19. The Adani group entered into a concession agreement in August 2020 on all three of these airports to operate, manage and develop them for a period of 50 years. The lease would become ­effective from the date of commercial operations.

With its fast growing and now the third largest domestic civil aviation industry in the world, India had initiated the public–private partnership (PPP) models in the 1990s not only to boost private sector investments in airports but also to reduce the fiscal stress on the federal government. In terms of ownership and control, the Indian airports may be classified into three: AAI-owned (more than 100 airports) and two types of PPP; state-driven with the state having a significant stake in ownership as in the case of Cochin International Airport Limited (CIAL) and the Kannur International Airport Limited (KIAL) and private-driven as in the case of Mumbai International Airport Limited (MIAL) and Delhi International Airport Limited (DIAL) with minimum shares owned by the AAI; a few more are being auctioned off to the private sector. While evidence suggests that the initial enthusiasm of the private-run PPP model has faded away as is the case of MIAL and DIAL mainly due to litigation in connection with finance and land dealings, the state-driven, in contrast, has so far not only been a success but also been a model for the rest of the industry. The primary question to be asked, in the context of PPP models in the aviation sector, is to what extent it has been a success in balancing the benefits for the state, passengers and private shareholders. Further, how seriously does the PPP model take environmental social responsibility as one of its critical agenda as in the case of state-driven airports in Kerala.

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Updated On : 4th Apr, 2021

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