A-I To Pick Up 5% Stake In Cochin Airport

Air-India will pick up 5 per cent equity in the proposed Cochin International Airport Ltd. This will be the first investment by an Indian carrier in a private airport project.

The Rs 500 crore project was initiated in 1995 on the build-own-operate format by a joint-sector consortium.

Air-India's contribution will be made by mid-1999 when the airport is expected to be ready to receive international flights. Air-India is expected to be the most important user of the airport followed by Indian Airlines and designated foreign carriers.

The total equity of the project is Rs 250 crore that will be held by private investors, banks and the state government. The Airports Authority of India (AAI) is likely to invest 10-15 per cent in exchange for installing and managing navigation equipment. The authority's investment will ensure government control over air space.

 

The Cochin airport, coming up 31 km outside Ernakulum, is incorporated as a company under the cooperative society format. The state government, the Housing and Urban Development Corporation Limited (Hudco), a consortium of banks and some Gulf-based NRIs are the main shareholders in the project. The Chief Minister of Kerala is the ex officio chairman of the company while P J Kurien, an IAS officer, is the managing director. The Cochin International Airport Ltd board comprises the state chief secretary and four others representing the main shareholders.

Work on the project commenced in 1996 with a corpus funds of Rs 250 crore that included equity and loans.

Several Gulf-based carriers as well as British Airways, Lufthansa and KLM have sought permission to operate from a second southern airport besides Chennai.

The main runway and the terminal building are near completion, while the installation of aerodrome hardware like runway lights is in progress, the sources said. Cochin International Airport Ltd plans to raise funds for future expansion through commercial exploitation of airport space.