Aranmula airport to land in two years

12 November 2012 | Kerala

 

The proposed INR 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 feet.

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% equity stake by Reliance Group. The combined market value of the group’s assets is nearly USD 1 billion.

The Kerala government plans to pick up a 15% stake in the KGS Aranmula International Airport — the company setting up the project. Further, the group is also in talks to divest nearly 10% 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 Mr. Gigi George, Managing Director, KGS Aranmula International Airport Limited “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 INR 500 crore for the

project. It is in discussion with leading banks to infuse another INR 500 crore. The project funding will have a 2:1 debt:equity ratio, he said.

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.

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

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.

Even though Kerala has only 2.75% of the overall population of India, the international aircraft movement in the State was 15.28% of the overall international aircraft movement of India in 2011-12.