Union Cabinet approves a greenfield airport at Kannur

New Delhi: A new greenfield airport at Kannur would come up soon with the Union Cabinet on Thursday giving in-principle approval to the project.

The Cabinet also approved a proposal for making the existing Nagpur airport into a multi-modal international passenger and cargo hub.

The Kannur airport, which is to be constructed through the public-private partnership route, would be built on 2,000 acres. The cost of the project has been estimated at Rs 929.5 crore.

A joint venture company, in which the Kerala Industrial Infrastructure Development Corporation (KINFRA) is to hold a 26 per cent stake, is being set up to implement the project.

The remaining equity in the company is to be with a private strategic partner. The airport operator would invest 30 per cent of the required capital investment with the rest coming in through debt financing. Official sources said that no equity participation was being sought from Airports Authority of India (AAI) for the project.

The Cabinet approval for the new airport was required as it is to come up at a distance of 80 km from the existing Calicut airport and 125 km from Mangalore airport.

The current Government policy does not allow a new airport to come up within 150 km of an existing airport.

The Kerala Government had strongly recommended the project as the airport would promote tourism and trade in the northern part of the State. The proposed airport would act as a cargo hub for perishable cargo including flowers, fruits and sea-food among others.

Nagpur airport

The Cabinet also approved the transfer of Dr Ambedkar International airport at Nagpur to a joint venture company which would work to make it into a world class multi-modal international passenger and cargo hub.

The joint venture company includes the AAI and Maharashtra Airport Development Company (MADC).

According to an official statement, a detailed study shows that Nagpur could be developed to handle 18.9 million passengers per annum in 2035 as against 200,000 handled by the airport in 2000.

The total capital cost for development of project has been estimated at Rs 2,581 crore till the year 2035, while the revenues from the project is estimated at Rs 5,280 crore.

The statement points out that the airport would be backed by many economic value addition activities including a Special Economic Zone (SEZ) spread over 2,435 hectares.