The equity structure of the green field international airport coming up at Kannur has been revised as the Airports Authority of India (AAI) decided to limit its equity to 10 per cent.
The sudden volte face of the AAI under the Civil Aviation Ministry and communication to the State that it does not need the remaining 16 per cent equity has surprised the proponents of the fourth international airport of the State.
The board of the Kannur International Airport Limited (KIAL) chaired by Chief Minister Oommen Chandy in principle has agreed to change the equity structure and limit the equity of the AAI from 26 per cent to 10 per cent. Official sources said the AAI had given only Rs. 100 crore towards the 10 per cent equity.
The State had been putting pressure on the Civil Aviation Ministry and the AAI to give the remaining Rs. 160 core for allocating the balance 16 per cent equity as the airport is gearing up for the first test flight later this month.
Under the new equity structure, 35 per cent of equity will be with the Government of Kerala, 25 per cent with Public Sector Undertakings, 10 per cent with airport PSUs and remaining 30 per cent with private individuals and institutions.
The private individuals and institutions have benefitted from the AAI decision as their share of equity has gone up from the previous 16 per cent to 30 per cent. There is also a two per cent increase in the equity of the PSU which has gone up from 23 per cent to 25 per cent.
The project is being executed on a Public-Private-Partnership (PPP) basis and on a Build-Own-Operate (BOO) model. The Phase I of the project is being executed by a government-led consortium at a cost of Rs. 1,892 crore including the cost of land acquisition
Private parties will benefit from AAI decision
Earlier stake of AAI was 26 per cent