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Kerala govt rewards Cochin airport whiz with another dream project

D Jose in Thiruvananthapuram

Cochin International Airport Limited Managing Director V J Kurien, who conceived and implemented the Nedumbasserry Airport project in the joint sector, will be bidding goodbye to 'his project', which many sceptics said will remain a dream.

The Kerala government has entrusted him with a strenuous task of implementing an ambitious project of linking the islands in Kochi with the mainland with resources to be generated from various sources. Kurien has reportedly agreed to take up the assignment, provided he is given the required functional freedom.

He has been able to complete the airport project almost to the schedule, as he was given a free hand to decide matters. He has been ruthless in dealing with people, inviting the wrath of certain political quarters.

One political party has already come out with certain charges against him. Although he is hated by political parties for his refusal to toe their line, they respect him as a taskmaster.

Kurien was extremely tactful in dealing with the oustees and various voluntary organisations that posed hindrances to the project. He said that the acquisition of the land for the airport has been his most notable achievement.

“I had to deal with not only ordinary people but also politicians and religious leaders of many hues in passing the hurdles. It was a job done well,” he said.

He said that many people were sceptical about the project. For similar proposed projects in Kerala are haunted by labour disputes, political intervention and environmental lobbying. “I was confident from the very beginning. Fortunately, the government allowed me to continue until the project was commissioned.”

Cochin Port Trust chairman, Babu Rajiv, an Indian Administrative Service officer of the Assam cadre, who has been appointed in his place, has the onerous task of liquidating the liabilities and putting the airport on the path of growth. Although Babu is equally known as a taskmaster, he has a tough job ahead, say observers.

Babu Rajeev, who has been instrumental in putting in place a move for privatisation of some operations at Cochin Port, is taking over the charge of the airport at a difficult time. The airport company's revenue is not even sufficient to pay the interests on loans worth Rs 1.8 billion the company had acquired for the construction of the airport. The company owes Rs 1.4 billion to Housing and Urban Development Corporation of India and Rs 250 million each to the State Bank of Travancore and Federal Bank.

The new managing director will have a hard time generating revenue for paying off the loan and meeting the funds required for urgent expansion works to be carried out.

The airport received revenue of only Rs 40 million in the first three months of the operation while the interest burden stood at Rs 110 million. The company's board of directors is divided over ways to bail out the company from its present crisis.

While a section of the directors had suggested expansion of the capital base by issuing additional shares to the public to the extent needed to liquidate the loans, the Kerala government, which holds the single largest stake in the company, is not in its favour. The government fears that it would not be able to raise the funds required to maintain its leading stake.

The government nominees on the board had suggested conversion of the loans into equities. It is not sure whether the financial institutions would be prepared for such a course in the light of the heavy losses being incurred by the company.

The board, which had met recently, has authorised the state chief secretary and managing director of the company to consult experts and come out with a viable proposal to solve the financial crisis.

The present crisis can be solved to a great extend if more operations into the airport are allowed. This is possible when the airport is declared as an international airport. The airport needs upgradation of facilities to handle more flights. The airport needs more parking bays, aerobridges, a parallel runway and other facilities to enable it to handle more flights. All this needs additional funds, observers said.

Rajiv, who has handled difficult Port Trust tasks, will have a testing time while trying to rescue the company from this catch-22 position, especially in the light of the chasm in the board. A few directors feel that a lobby within the board, having "foreign connections", has ulterior motives ("to pocket more shares").

'Tiny state, three airports and politics over profits & losses'

Business

Kerala