God's own country Kerala to get its fifth, fully private international airport

HENNAI: In Kerala, they have their heads in the clouds and eyes on non-residents. A fifth international airport-and India's first wholly private one-is coming up in a state where no highway is more than half as wide as the National Highways Authority of India's standard minimum of 60 metres.

No other state in the country has as many international airports. Tiny Kerala, where narrow roads are the norm due to lack of land, clearly bets its future on its vast army of non-resident Keralites whose remittances account for 31% of the state's GDP.

Fittingly enough, the new airport is coming up at Aranmula in Pathanamthitta district, where a toy plane flown into a crowd could well hit a non-resident Indian.

"It's going to be the most state-of-the-art airport in the state, with two runways and a taxiway," Gigi George, managing director of the Chennaibased KGS Group, the airport's promoter company, told ET.

George said the company has got every clearance in hand and 750 acres have been acquired for the project.

The Aranmula airport will be close to multiple tourism destinations such as Kumarakom, the backwaters of Alappuzha, and the high ranges of Kumily, the Thekkady tiger reserve, and most of all, the pilgrimage centre of Sabarimala Ayyappa temple in Pathanamthitta district.

Doubts about viability of fifth airport

Kerala has international airports in Thiruvananthapuram, Kozhikode and Kochi, the last being a joint sector project. Another international airport is being developed under publicprivate partnership (PPP) in Kannur.

Kerala State Industrial Development Corporation Executive Director TP Thomaskutty said the Aranmula airport project would be presented at the forthcoming 'Emerging Kerala' global investor meet in September. He saidKGS Group had got some of the clearances for the project. Everybody is not convinced about the viability of a fifth airport in one of the tinier states in the country.

"There are limits to Kerala's air traffic growth, because it is not an industrial economy. Road development in the state would serve more people better," said Abraham Joseph, a retired project engineer of Nedumbassery airport in Kochi, who has been associated with two other airports.

"Even the Kannur airport is one too many in the area, considering that the Kozhikode and Mangalore airports are close to the proposed airport," he said.

KGS Group's George counters this with statistics showing that Kerala's air traveller numbers have multiplied from 2 million in 2004 to nearly 10 million a year now, and said there is no slowdown yet in the pattern of Keralites' migration. The number of domestic air travellers is also on the rise.

In fact, George said his company would focus on the market potential of attracting well-off pilgrimage tourists from different parts of the country to Sabarimala.

The KGS Aranmula International Airport project has an outlay of Rs 2,000 crore, with a 1:1 debt-equity ratio. The first phase of the project is expected to cost Rs 750 crore. The project has Malaysia Airports as its technical and strategic partner.

KGS Developers, in which Anil Ambani's Reliance Capital and Reliance Infra hold a 15% stake, expects the first flight to land at Aranmula in less than two years.

Although George said the company has got all necessary clearances, the project is still facing opposition from local environmental and social organisations and activists.

"The area is a wetland, and a flood-plain region for the seasonal flooding of the Pampa river, and there are paddy fields, too," said NK Sukumaran Nair, general secretary of Pampa Parirakshana Samithy, an environmental organisation leading the agitation against the project.

But even Nair admits that all political parties, including the Left, Congress and Bharatiya Janata Party, seem to be in agreement in allowing the promoters to realise the project.

That is a rare consensus in a land known for its hartals and political violence. Curiously enough, another case of that rare political unity was two years ago when the opposing fronts petitioned the Centre for exempting National Highways in the state from the highway authority's standard minimum width of 60 metres.

Clearly, the god's own country is looking into the sky for salvation from its poor transport infrastructure. A case in point: annoyed by road traffic bottlenecks, local entrepreneur and Kalyan Group chief TS Kalyanaraman recently bought a private jet, stating it was 'plain necessity'.\

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/gods-own-country-kerala-to-get-its-fifth-fully-private-international-airport/articleshow/14725905.cms?curpg=2

Airport Metro to shut down services for unspecified period

Delhi Metro’s Airport Express line that caters to hundreds of passengers on a daily basis will close down from Sunday for an unspecified period.

“The Delhi Metro has received a communication from Reliance, the concessionaire, on Friday evening that they intend to stop services from Sunday,” said a DMRC spokesperson. “We would be asking them to intimate the date by which they would be able to resume services after carrying out the rectifications required on the line,” said the spokesperson.

The Airport Express line is the country’s first public-private-partnership Metro project that provides connectivity from the heart of the city, Connaught Place, with Terminal-3 of the Indira Gandhi International Airport in less than 20 minutes.

http://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/article3612091.ece

Air Arabia opens travel shop

Low cost carrier Air Arabia has opened a travel shop in the city to serve as a one-stop shop for its customers. The opening of the shop, on the Royal Road in the city, is aimed at connecting with the airline’s customers by providing them more opportunities to travel to the Gulf, a release said.

13 destinations

The carrier flies directly from its hub in Sharjah to 13 destinations in India including Hyderabad, Ahmedabad, Chennai, Jaipur, Kochi, Mumbai, Nagpur, Coimbatore, Thiruvanathapuram, Bangalore, Kozhikode, New Delhi, and Goa.

http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/article3612526.ece

Indian Pilots Guild raises fresh demands

As the Air India management and pilots have failed to arrive at a solution in the first round of conciliatory talks before the Labour Commissioner, the Indian Pilots Guild has served a fresh charter of demands to the management on Friday.

The four-hour-long conciliatory proceedings before the Deputy Chief Labour Commissioner, following directions by the Delhi High Court, didn’t yield any resolution. No new date for the next hearing has been fixed.

“As per the High Court order, all pilots have reported to work again. Today, we came for this conciliatory meeting. But unfortunately, the Air India management didn’t reciprocate our goodwill gesture of reporting to work again,” Indian Pilots Guild joint secretary Tauseef Mukadam told reporters after the proceedings.

He said the AI management sought more time to consider the demands. The Deputy Labour Commissioner has recorded the proceedings and will submit a report to the High Court on July 9.

Meanwhile, indicating the distrust between the AI management and the pilot’s body, the Indian Pilots Guild on Friday wrote to the Chairman and Managing Director, AI, with a copy to Deputy Labour Commissioner, seeking resolution of their demands/grievances.

In its charter of demands, the guild demanded urgent revocation/withdrawal of all the orders regarding termination of the services of pilots of erstwhile Air India, guaranteeing that no punitive action and/or administrative proceedings and/or any kind of victimisation would be imposed on the pilots of the guild.

Similarly, it also demanded that all the line pilots of erstwhile Air India and members of the guild be paid pending salaries, flying allowances, and layover sustenance allowances, which has been paid to the rest of the pilots of the erstwhile Air India and erstwhile Indian Airlines; recognising of IPG as the only representative body to represent the interests of the line of pilots of erstwhile Air India, and withdrawal of the Air India complaint to DGCA, which resulted in the show-cause notices threatening to cancel the licences of the pilots.

http://www.thehindu.com/todays-paper/tp-national/article3611790.ece

SpiceJet to operate flights to Chennai, Bangalore

SpiceJet will introduce four new flights from Gannavaram airport from July 19 to cater to the needs of passengers bound for Chennai and Bangalore.

The airline also proposes to temporarily discontinue some services to Hyderabad on three days in a week — Friday, Saturday, and Sunday — citing technical problems.

Meanwhile, ticket booking agents of the airline say they are worried that the bookings will dwindle as patronage may come down for various reasons.

While internal problems for cancelling the flights between Gannavaram and Shamshabad are not known, officials of the Airports Authority of India have confirmed that the airline has requested for cancellation of some flights “due to technical reasons.”

AAI nod sought

With Kingfisher discontinuing its flights between Vijayawada and Bangalore and the Jet Airways (Jet Konnect) operating a single flight to and from Bangalore via Hyderabad based on demand, SpiceJet has officially sought the permission of the AAI to operate the services to Bangalore and Chennai.

With this, connectivity is being restored to Chennai after a long gap.

AAI Station Director C. Pattabhi told The Hindu that approval would be given from July 19 if the airline met all the requirements. With both Jet Konnect and SpieJet ferrying passengers, the connectivity to Bangalore would improve.

http://www.thehindu.com/todays-paper/article3612226.ece

Mallya flies high despite Kingfisher

Can a defaulter owing a public sector bank Rs. 40 crore persuade that bank to sanction him Rs. 150 crore in further loans before paying back a rupee? Can he get that bank to lower his debt to less than half of what he owed it? Can he have the terms of sanction amended repeatedly so that the personal guarantee demanded of him disappears? And can he get the bank to change the very purpose for which the loan was given?

Yes, if the defaulter is part of the United Breweries (UB) group headed by Vijay Mallya and the institution is Bank of Maharashtra (BoM). And it shouldn’t take more than two months. You can even get the first pay-out of your loan — before you have shown compliance with even its greatly weakened terms and conditions.

“There are fears within the bank that this Rs. 150 crore from BoM to a UB group company may really be about raising money for the group’s struggling airline, Kingfisher,” a whistleblower within the bank told The Hindu . “The changes in terms, conditions and purpose of the loan are worrying. And BoM might well sanction further amounts. This fund-raising drive is surely on in other banks, too. Which would explain the limited amounts from each of them.” Kingfisher has a debt of over Rs.7,000 crore and has not paid employees’ salaries for months. It has defaulted on tax payments and vendors complain of unpaid bills. BoM’s Rs. 150 crore (so far) will not dent a debt that size. But it could help raise a desperately needed short-term working capital of Rs. 700-800 crore. A UB Group spokesperson, however, asserted that there was no “practice of inter-company funds diversion” ( see box in Business Page ).

On March 29 this year, BoM sanctioned a new loan of Rs. 100 crore to United Spirits, a UB group company. Aware that another UB Group concern, UB Engineering, still owed the bank money, BoM’s Credit Approval Committee (CAC) was initially cautious. The new loan could happen only “after repayment of full recompense amount of Rs. 40.60 crore to the satisfaction of the bank along with up to date interest in respect of dues of M/s UB Engineering Ltd ...”

By April 21, barely three weeks later, a new sanction letter had dropped mention of the Rs. 40.60 crore. Now, it was up to the bank's Recovery Department to “inform the amount of dues to be recovered from M/S UB Engineering” in line with the bank's recovery policy. By May 22, the amount sought to be recovered from UBE was down to Rs. 19.9 crore.

On March 29, the CAC had mandated that the loan to United Spirits be “utilized solely for future purchase (emphasis added) of casks (approx 1.28 lakhs) for maturation of spirits.” Also, “the bank would make payment directly to suppliers and vendors.” And no reimbursement would be allowed “in respect of assets already purchased.” This firmness, the BoM whistleblower told The Hindu , “arose from fears of the UB group diverting the money to Kingfisher.” Yet, by May 11, the firmness vanished. “Amount already spent on procurement of casks shall be allowed as margin towards promoter’s contribution,” said an amendment to the sanction. Nor would the bank deal directly with suppliers and vendors. “Necessary details such as original bills, present value of casks etc. in respect of casks already procured (emphasis added) should be obtained and held on record.” That, scoffs a banker, “means bills for stuff purchased ages ago might be used to show compliance with the loan terms and conditions. Perhaps no actual rule is broken. But the bank changing its own condition to ‘already procured,’ raises worries.”

The Hindu sent an email to BoM Chairman & Managing Director Narendra Singh, raising some of these issues. To which the Bank’s Chief Law Officer responded: “We cannot divulge any information relating to the affairs of any of our constituents.” This was “in view of the Bank’s legal obligation to maintain confidentiality and secrecy of its constituents accounts.” As required under “Section 13 of the Banking Companies (Acquisition & Transfer of Undertakings) Act 1970.” Given that one of the queries was simply whether all RBI directives had been followed in making the loans, the secrecy argument appears redundant.

By June 21, the amended purpose of the loan read: “For CAPEX (capital expenditure) requirement of the company for ongoing expansion (total project cost Rs. 1078 crores).” The strict original purpose had been drowned in a broader project. The loans have so far seen one sanction letter cancelled and a second one amended four times.

On March 29, the bank called for a ‘Personal Guarantee’ from Mr. Mallya as part of the deal. It also sought a ‘Corporate Guarantee’ from Four Seasons Wines Ltd (a UB Group company) and from United Breweries Holdings itself. It required the “latest net worth details of Mr Mallya be obtained before disbursement and it should be satisfactory.” By April 21, the ‘personal guarantee’ condition had vanished. Nor was one required from UB Holdings Ltd any longer. A guarantee from just Four Seasons Wines would be enough.

The Bank of Maharashtra grew more generous by the week. The March 29 sanction had required Credit Reports (CRs) from all other banks dealing with the borrower company/group. (The 18-bank consortium of lenders to Kingfisher Airlines includes 14 public sector banks). This was to certify “satisfactory dealings with respective banks prior to disbursement” of the loan. By April 21, the CR was to certify “satisfactory dealings” of group companies “other than Kingfisher Airlines” with the banks, prior to loan disbursement. The new letter sanctioned a further Rs. 50 crore loan beyond the original one of Rs. 100 crore.

On May 11, the bank further amended the sanction terms. Now the borrower was only required to obtain the credit report “within 90 days from 1st disbursement.” Likewise, the borrower was given 90 days after first disbursement to produce No-Objection Certificates (NOCs) from all other banks dealing with the Group “in respect of existing working capital and Term Loan lenders.”

In other words, alleged a BoM whistleblower: “We give them money before they fulfil any loan conditions. And the Rs. 50 crore looks like a hand-out to pay off the money earlier owed. This may not end at Rs. 150 crore. There might be further loans soon.”

The April 21 sanction letter stressed that the Rs. 150 crore “should not be utilised for extending loans to subsidiary companies / associates or for making inter-corporate deposits.” It sought a ‘suitable undertaking’ from the company to this effect. “They were still worrying about diversions to Kingfisher,” says a bank official. They soon stopped worrying. By May 11, this condition was: “Waived.”

In April, the borrower was forbidden from effecting “any change in their capital structure” without “prior approval of the bank in writing.” They were not to undertake mergers, new projects or expansion without the bank’s consent. By May 11, the company was merely required to “keep the bank informed in writing” of any such changes. The Bank’s consent was no longer needed.

Replying to a questionnaire from The Hindu, a UB Group spokesperson said that “BoM sanctioned a loan of Rs 150 crores on terms and conditions comparable to loans taken by United Spirits Ltd from other nationalised banks after due negotiations.” The reply confirms that the drive involves other banks, too, ( see box ). Such as the Punjab National Bank. The spokesperson claimed the “sacrifice amount” made by the Bank of Maharashtra was no more than Rs. 17.43 crores and part of a legitimate one-time settlement.

Most importantly, the UB Group Spokesperson asserted that: “USL does not follow any practice of inter-company funds diversion. In particular, USL has not lent any funds whatsoever to Kingfisher Airlines.” Why, then, has Bank of Maharashtra exempted Kingfisher airlines while seeking proof of “satisfactory dealings” of group companies? The Bank’s Law Officer pleads “confidentiality and secrecy.”

“This isn’t about just one but many public sector banks, involving hundreds of crores — more public money than we know about,” says the Bank of Maharashtra whistleblower. “On the one hand, media reports speak of lenders turning the screws on Kingfisher. On the other, UB Group companies seem to be able to get money, perhaps even from the same lenders, on terms defaulters can’t get. The total amount could be startlingly large - as also the risks involved for the banks.”

“The Bank of Maharashtra has lakhs of farmers, working people and retired employees amongst its depositors,” the whistleblower added. “We are called the common man’s bank. The farmers — routinely blamed for our NPAs — today struggle to get tiny amounts as loans. But big corporations like UB get hundreds of crores in weeks in a manner most risky to the bank. And these kinds of deals won’t figure in our discussions of NPAs.”

http://www.thehindu.com/todays-paper/article3611771.ece

Call for more flight services

Madurai, July 6:  

The Tamil Nadu Foodgrains Merchants Association has urged for operation of flight services from Madurai to countries like Malaysia, Singapore and Dubai. Mr S. P. Jeyaprakasam, President of the association, in a statement here, urged for an early start of flight services from Madurai to countries like Malaysia, Singapore and Dubai. He said facilitation of such services would lessen the ordeal of passengers from southern districts to go over to Chennai to board the flights to such destinations. Moreover, the export and import business from the southern districts to these countries are growing and the operation would indeed be a boon to business travellers. Mr Jeyaprakasam welcomed the plan to operate a tri-weekly flight service to Colombo from Madurai with effect from September 1, announced by Mr Manick Tagore, Member of Parliament from Virudhunagar Constituency, near here.

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/article3610883.ece

Mumbai Airport commissions new exit taxiway

Mumbai, July 6:  

The Chhatrapati Shivaji International Airport, managed by the GVK Group, said it has commissioned a new exit taxiway.

The new taxiway will help save up to 10 seconds of runway occupancy time for an aircraft.

The rapid exit taxiway N5, located on the northern side of the primary runway 09-27, will reduce the arrival runway occupancy time by 9-10 seconds, a statement from the Mumbai airport said.

The new taxiway is 415 metres long and can facilitate all wide-bodied aircraft, including the Airbus A380, the statement added.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/article3610809.ece