THIRUVANANTHAPURAM: The state government’s attempt to take over the Trivandrum International Airport has seen a major shift with Cochin International Airport (CIAL) deciding to not take part in the bidding separately.But CIAL, Kannur International Airport (KIAL), and other institutions like KSIDC, KIIFB and NIIF will be part of the special purpose vehicle (SPV) to be formed, with state providing equity in it as technical partners/investor/financial institution.
It follows a December 12 communication from the Centre informing the state they have considered the latter’s request seeking rights of first refusal (ROFR) to the SPV to be formed to participate in the bid along with the strategic partner, who has vast experience.
The Centre said in its communication the option of ROFR evinced by the state is the most practical option, which is acceptable to it as well as the state government.
Speaking to Express, CIAL Managing Director V J Kurian said it would not contest in the bidding independently, but would be part of the consortium of institutions formed in connection with the SPV. If CIAL contests separately, it will amount to conflict of interest and as per the terms and conditions of the Centre’s request of proposal (RFP), a company is not eligible to contest for bidding through two different ways.
CIAL Managing Director V J Kurian said the SPV would have more chances to win the technical and financial bids as it can simply achieve the pre-qualification figure of Rs 3,500 crore stipulated by the RFP.
According to Principal Secretary K R Jyothilal’s order, the state has decided to set up an SPV called TIAL, to be registered as a private limited company with an initial authorised share capital of Rs 10 lakh and paid-up capital of Rs 5 lakh, after examining the matter in detail. Share-holding pattern in the SPV would be modified according to the requirements as part the terms and conditions in the RFP to be released by the Centre in case it goes ahead with the bidding.
KIAL, CIAL, KSIDC, KIIFB, NIIF and other institutions may be offered equity in the SPV as technical partners/investor/financial institutions. Similarly, MD, KSIDC, will take necessary action to register the SPV as a company at the earliest and follow-up action as and when GoI takes a final decision in this regard.
There were apprehensions over the pre-qualification criteria in the RFP in which there were so many ‘gray areas’ like stipulating Rs 3,500 crore as revenue for last seven last years to prove technical expertise.
Further, if there is any subsidiary company in the consortium of companies which takes part in the bidding, each company, the revenue of which to be considered to reach the figure of Rs 3,500 crore, must have at least Rs 1,400 crore (40 per cent of 3,500) each, to get it considered with the total revenue of Rs 3,500 crore, along with some other criteria. If CIAL and institutions like KIIFB contest in the bidding in the form of a SPV, it can meet the technical and financial criteria, says experts.