Special Correspondent

The international airport will be set up through public-private partnership

NEW DELHI: The Union Cabinet on Thursday gave in-principle approval to Kerala for setting up a new greenfield international airport in Kannur through the public-private partnership (PPP) route, relaxing the policy on airport infrastructure relating to greenfield airports.

The proposal, approved by a meeting of the Cabinet chaired by Prime Minister Manmohan Singh, aimed at boosting tourism and economic activities, Information and Broadcasting Minister P.R. Dasmunsi told reporters here. The proposed airport would also act as a cargo hub for perishables such as flowers, vegetables, fruits, and seafood.

The airport would be built over 2,000 acres of land and have a single runway. Sanction has already been accorded for land acquisition. The airport will be located in Kannur district, falling outside the municipal limits of Kannur. The site is about 80 km (aerial distance) from the Calicut airport, 229 km from Cochin and 125 km from the Mangalore airport.

The project would be implemented at an estimated cost of Rs.930 crore, excluding costs relating to land acquisition, resettlement and rehabilitation, which would be borne by Kerala.

Competitive bidding

A joint venture company would be set up between a private strategic partner with a 74 per cent equity and the State government entity Kinfra (Kerala Industrial Infrastructure Development Corporation), which would have 26 per cent equity. The State would select the strategic partner through a competitive bidding process with guidance from the Centre.

According to a study conducted by the Airports Authority of India (AAI), the impact of the proposed Kannur airport is likely to be felt at the Calicut airport as 55 per cent of its traffic is expected to get diverted. The estimated loss of revenue due to the diversion of traffic is expected to be 27.6 per cent at the Calicut airport, 5.1 per cent at Cochin, 3 per cent at Bangalore, and 1.5 per cent at the Thiruvananthapuram airport.