Seeking to stave off the Centre’s plan to privatise Thiruvananthapuram airport under its watch, the Communist Party of India (Marxist)-led Left Democratic Front (LDF) government in Kerala has applied on the tender through its Kerala State Industrial Development Corporation Ltd (KSIDC).

The Pinarayi Vijayan-led government has picked KSIDC to apply on the tender to get the benefit of the right of first refusal (RoFR) granted to state-owned entities in government auctions. It will also help the government pass the eligibility criteria set by the Airports Authority of India (AAI) for bidders by using the financial and technical muscle of a broad range of state-owned entities under its control, Kerala government officials told BusinessLine .

The state government has hired KPMG and Amarchand Mangaldas to help put in a bid for the airport in the state capital, the official said, asking not to be named.

Special purpose vehicle

The state government is in the process of forming a special purpose vehicle (SPV) - ‘Trivandrum International Airport Ltd’- to comply with the tender conditions. The SPV will be initially fully-owned by state government entities. “If successful in winning the tender, we will induct 1-2 strategic partners by diluting up to 49 per cent stake in the SPV,” the official said.

“Due to the extremely short timeline in submitting a bid, we are yet to identify the strategic partners which, in any case, is a time-consuming process,” the official added. The Kerala government initially told the Centre of its desire to take over and run the airport on nomination basis (without a tender).

The Centre rejected this proposal and instead suggested that the state government could utilise the RoFR granted to state-owned agencies in government tenders, which allows them to match and take over the airport if its bid came within ten per cent of the price quoted by the highest bidder.

The Kerala government is competing with firms such the GMR Group, Adani Group, National Investment and Infrastructure Fund (NIIF), Fairfax India Holdings, Australia’s AMP Group and PNC Infratech Ltd, BusinessLine reported on Saturday.

Aside Thiruvananthapuram, the other airports lined up by the Centre for privatisation includes include those at Ahmedabad, Guwahati, Jaipur, Lucknow and Mangalore.

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