stanleypaulus.com: Aranmula airport to take off in two years

The proposed Rs 2,000 crore greenfield airport at Aranmula, in the Pathanamthitta district, Kerala, has been facing stiff opposition for several months.

However, the Chennai-based KGS Group, which is supposed to construct and manage the airport, is confident that the first flight will take off before December 2014. But, other than three or four political flags, there is little sign of any work going on at the project site in Aranmula, which is spread over nearly 700 acre. However, the prime fully-developed land (the runway) has been levelled up to 12 ft. KGS’s confidence stems from a possible equity dilution in favour of the Kerala Government, which could effectively put most protestors at bay.

The group, which has interests in property development, paper mill and engineering, is promoted by three people and a 15 per cent equity stake by Reliance Group. The combined market value of the group’s assets is nearly $1 billion.

Government support

The Kerala government plans to pick up a 15 per cent stake in the KGS Aranmula International Airport — the company setting up the project. Further, the group is also in talks to divest nearly 10 per cent stake to Malaysian Airports, which is also the technical partner. Malaysian Airports has appointed KPMG to do the due diligence.

“There has been opposition to the project, but we are convincing each and every person opposing the project on the importance of an international airport in Aranmulla,” said Gigi George, Managing Director,KGS Aranmula International Airport Ltd. “There is a not a single case against the project,” he said.

The project, which was conceived in 2009, was approved by the previous State Government headed by the Left Front, while the Cabinet of the present Congress Government gave its clearance recently. The KGS (representing the promoters Kumaran, Gigi George and Shanmugham) Group has brought in Rs 500 crore for the project. It is in discussion with leading banks to infuse another Rs 500 crore. The project funding will have a 2:1 debt:equity ratio, he said.

Aranmula, which has been declared as a global heritage village by the UNESCO, is noted for its ancient temple dedicated to Lord Krishna (Parthasarathy), the Snake Boat Regatta held in the holy river Pampa and for the metallic mirror.

Local fears

The local people fear that the airport could harm the ‘heritage’ tag of the town. However, the company denied that the airport will have any effect on the heritage culture.

People also fear that the airport will affect the structure of the famous Parthasarathy temple, which is located just a few hundred metres from the project site. This, too, was refuted by George.

The airport is designed to cater to aircraft such as Airbus A-320 and Boeing 747. The terminal building is designed to handle nearly 1,000 passengers at a time. The project will generate direct employment for 1,500 people and indirect for over 6,000, he said.

On choosing Aranmula, which is sandwiched between Kochi and Thriuvanthapuram airports, for an airport, George said the location was an ‘influential zone’ and close to multiple destinations such as Kumarakom (35 km), the back waters of Alappuzha (35 km) and high ranges of Kumily and Thekkady tiger reserve.

Huge possibility

However, the biggest attraction is that it takes only an hour’s drive to Sabarimala, the second largest pilgrim centre in India, that receives about 60 million pilgrims annually . The airport will provide infrastructure to pilgrims who wish to travel by air.

At present, Thiruvananthapuram or Kochi airports are the closest but people need to spend at least four hours on travel from there.

The company hopes that one in 200 coming to Sabarimala may use the Aranmula airport. This could be very cost effective for passengers. At present, for a traveller from Dubai to Thiruvanthapuram, the flight charges could be Rs 10,000. It costs another Rs 10,000 to travel from Thiruvanthapuram to Aranmula, he said.

Further, nearly 40 per cent of Kerala’s air traffic hails from this zone, he said. George added that the airport is expected to serve four districts in Kerala — Pathanamthitta, Kottayam, Idukki and Alappuzha which together account for 21 per cent of foreign tourists and 14 per cent of domestic tourists, he said.

Even though Kerala has only 2.75 per cent of the overall population of India, the international aircraft movement in the State was 15.28 per cent of the overall international aircraft movement of India in 2011-12. The company hopes to generate two-third of the passenger traffic on its own and hopes to divert one-third from from Kochi, Thiruvanthapuram and Kozhikode airports.

“If the project is to be viable, the project cost needs to be low. That’s what we have done. When compared to other projects, our cost is very low,” he said. Out of the Rs 2,000 crore capital and promoters’ contribution will be Rs 700 crore and the balance through debt.

raja.simhan@thehindu.co.in