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The project is to be developed in six phases

• State-owned Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) are in the race to make “participatory investment” in the proposed greenfield international airport at Kannur in North Kerala.The move by these two follows a call given by the Kerala Government for 23 per cent equity participation by public sector undertakings in the proposed airport project.The HPCL board, at its meeting held here on February 9, had given its approval to explore the possibility of taking up 11 per cent equity stake amounting to Rs.55 crore in the proposed airport project.
• Following the board approval, HPCL would now make an offer to Kannur International Airport Limited (KIAL). The investment proposal, however, comes with a rider. It calls for grant of rights to HPCL for design/development/operation/maintenance of all fuel facilities and into-plan operations at the airport, either solely or jointly with KIAL.If more than one OMC (oil marketing company) is granted the rights to develop and operate fuel facilities, HPCL's investment in airport equity open for Central PSUs (Rs.93.50 crore) would be in proportion to the percentage share of HPCL in the joint venture company which will be formed for developing and operating fuel facilities.BPCL, too, has informed KIAL of its interest in taking 11 per cent equity subject, of course, to the condition that fuel farm rights should be exclusively given to it on the lines of the Cochin Airport model.Sources, however, said KIAL was not inclined to give solo rights for fuel farming to BPCL. Instead, it would pitch for a joint venture model.
• The greenfield airport is expected to cater to the Kannur-based NRI (non-resident Indian) population, which constitutes a significant portion of the current passenger traffic at Calicut and Mangalore airports. Through its arm, Kerala Industrial Financing Corporation (KINFRA), the State Government has completed the acquisition of 1,275 acres, which will be sufficient for aviation-related part of the project. An additional 725 acres is being acquired for commercial purposes.The project is expected to be put up at a capital cost of Rs.1,130 crore and is to be developed in six phases.BPCL had managed to secure equity participation of 9 per cent of the Cochin International Airport and, hence, the sole rights to set up and operate the fuel facilities at the airport.

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