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COCHIN INTERNATIONAL AIRPORT - MAKING OF A WONDER

Cochin International airport, the country’s first greenfield airport built under public private partnership is a trendsetter and a pathbraker in aviation infrastructure development. The unique rehabilitation package, the astonishing public participation and a sustainable business model have made Cochin International Airport Limited (CIAL) - the company which operates the airport - an international brand. The saga of making of Cochin International Airport has been inspiring. When a novel concept, its meticulous execution and a motivating leadership blended together, a dream was set to be realised.

THE CONCEPT AND THE LEADERSHIP

The original airstrip in Cochin was built in the year 1936. Since independence, Indian Navy operated Cochin Airport, though it permitted civilian aircraft also to use the facility. The Gulf boom in the 1980s called for a massive up-gradation of the Naval Airport for the operation of bigger aircraft. However, the National Airport Authority (NAA), the owner and operator of all Civil Airports in the Country, expressed their inability to make further investments in an Airport owned by the Indian Navy. Subsequently, during a meeting chaired by the Union Civil Aviation Minister Sri. Madhav Rao Scindia in October 1991, Government of Kerala was advised to identify a suitable location for constructing a new Airport at Cochin.

Nedumbasserry Village – before acquisition

The onus of identifying a suitable location for the new Airport fell on Sri. V J Kurian, an IAS Officer of the 1983 batch, who was then District Collector of Ernakulam –a decision, which later turned out to be the corner stone of Cochin International Airport Project. A few locations were identified by Sri. Kurian, including Cherthala, Edakkattuvayal, Thengode, Maradu, HMT land near Kalamasserry etc., but finally Nedumbasserry, a quiet village near Angamaly was chosen as the most suitable location for the Airport, mainly due to its access to railway line and national highway.

Approval was granted to the new location, but financial constraints did not allow NAA to invest in the project. However, they promised technical support for building the new Airport. Assured of a technical assistance, Sri. Kurian took up the challenge of mobilizing funds for this mammoth project, which was initially estimated at a whopping Rs. 200 Crores in 1993.

Since the Government was not in a position to take the entire financial burden of the Airport project, Sri. Kurian conceptualized the novel idea of developing an Airport with the joint financial participation of Airport users (mainly non-resident Indians), Airport Service Providers and the Government. Shri. K Karunakaran, then Chief Minister, who was a great visionary could immediately foresee the great potential of this concept and permitted Sri. Kurian to go ahead with the proposal, despite severe opposition from bureaucratic circles. This concept paved the way for the development of not only Cochin International Airport but many other Airports in India including Bangalore and Hyderabad in the Public-Private Partnership (PPP) Model and later became a subject for Case Study at Harvard University, IIM Ahmedabad and IIM Kozhikkode.

Subsequently, Kochi International Airport Society (KIAS) was established under the Charitable Societies Act, with Sri. K Karunakaran as Chairman and Sri. V J Kurian as the Managing Director with an initial capital of Rs. 20,000/- contributed to the Airport project by Sri. Jose Maliakal, an NRI from Germany. Greater Cochin Development Authority provided office space for KIAS at their Marine Drive Shopping Complex for a very nominal rent. Help also came in the form of office furniture from Ernakulam Chamber of Commerce, one computer from Cochin Chamber of Commerce and a fax machine from the Vyapari Vyavasayi Ekopana Samiti – a humble beginning indeed.

Sri. K Karunakaran
Founder Chairman

Sri. V J Kurian
Founder Managing Director

First major contribution to KIAS came from Sri. C V Jacob, Chairman of Synthite Group who contributed Rs. 25 lakhs. Associate Members of KIAS also chipped in with their contributions. Committees were formed in different Countries with sizeable Malayalee populations in order to mobilize contributions to the Airport project from Non-resident Keralites.

Meanwhile, earnest efforts were also made to mobilize contributions from the Non-resident Keralites in the Middle-East Countries with the help of Sri. MA Yussufali, Chairman of the Cochin International Airport Development Committee and Sri. K.V Prakash, the Chief Co-ordinator. Sri. Kurian introduced the following scheme for mobilizing funds through KIAS;

Avail an interest free loan of Rs. 5000.00 for a period of 6 years, from individuals. For the repayment of the deposit after 6 years without interest, half of this amount (Rs. 2500.00) will be utilized for purchasing a Kissan Vikas Patra ( a Savings Scheme of the Government of India in which an amount doubles itself in 5 ½ years).
The remaining half will be utilized for funding the Airport project. At the time of introduction of this scheme it was envisaged that about Four lakh people will provide an interest free loan of Rs. 5000 each which will accumulate to a total of Rs. 200 Crores. Out of this amount collected, Rs. 100 crores will be utilized for purchasing Kissan Vikas Patra for the repayment of loan after 6 years and the remaining Rs. 100 Crores will be available for the project.

However, by December 1993, the total amount mobilized by KIAS through this scheme was only around Rs. Four Crores against a target of Rs.200 Crores, despite the best efforts of Sri. Yussufali and his team.

Sri. VJ Kurian , Prof. KV Thomas,

Sri. K Karunakaran & Sri. TM Jacob during a meeting in 1993

KIAS being a Charitable Society had several limitations for raising funds. Therefore, the proposal for constituting a Public Limited Company was mooted, which would not only enable raising large equity investment from Government, Institutions and public investors, but also will have a base for debt leveraging through Institutional lenders. On March 30, 1994, Cochin International Airport Ltd. (CIAL) was formed with an Authorized capital of Rs. 90 Crores with Sri. K Karunakaran as its Chairman and Sri. V J Kurian as the Managing Director.

An internal team was formed in CIAL during 1994 consisting of Abraham Joseph-Project Engineer, R Venkiteswaran-Company Secretary, Alex Varghese- Head of Finance, Jiji Ramesh - Head of HR and T N Kalyana Sundaram. An expert team from NAA consisting of N U Bhaskara Rao, ACK Nair, AM Shabeer, R.Ganesan and S.Sundera Raman joined CIAL in April 1996. TEAM CIAL worked together as a coherent team and left no stone unturned to reach the heights that it always dreamed of.

Though the core team was in place, mobilization of funds was the biggest stumbling block. Meanwhile, KIAS had already commenced the land acquisition process for an initial area of 500 acres. It was virtually impossible for a rollback. Government of Kerala was however reluctant to contribute money for the project at this stage. A reputed US Consultant, who was appointed to prepare a design for the Terminal building, came up with a mind boggling estimate of Rs. 500 Crores, which upset all calculations. There were road blocks everywhere, but this could not dampen the enthusiasm of Team CIAL.

INITIAL CHALLENGES

The huge estimate of Rs. 500 Crore prepared by the US Consultant for the Terminal building was the first hurdle. Sri. Kurian was not inclined to accept this huge figure and instead relied on KITCO, a local Consultancy Organisation to prepare a fresh design for the Terminal buildings based on a low-cost concept. KITCO did not have any experience in building an Airport. However, with the support and encouragement of CIAL team, they did rise up to the occasion by preparing an innovative and cost effective design, which was only less than one fifth of the estimate prepared by the US Consultant.

Acquisition of land was another huge challenge. An area of 1253 acres of land was required for the project, which belonged to 3824 land owners and 822 households, who vigorously opposed land acquisition with the active support of local leaders cutting across party lines. Three temples and two churches were to be demolished. Four major roads, three high tension lines and even a river needed to be realigned to facilitate construction of the runway. And to make matters worse, adequate funds were not available to pay compensation to the evictees. The public outcry for stopping the project altogether was at its peak. These were trying times for Sri. Kurian and his Land acquisition team led by Smt.I C Anna. They somehow needed to convince the land owners of the importance of the project and the benefits it would bring them. Almost 41 rounds of negotiations were held with the land owners with the active participation of local MLAs including Sri. K Babu, Sri.P J Joy , and Sri. S Sarma. To appease the land owners, a novel scheme was introduced wherein the land owners were offered negotiated rates for their property. All those who agreed to hand over their land were entitled to several rehabilitation benefits, including the free-hold title of a 6 cent developed property free of cost. This unique rehabilitation package , which later became a case study for World Bank, worked wonders – as many as 719 persons came forward for negotiated settlement, which sent out a strong message to the public that the project was indeed taking off.

Lack of funds was another major hurdle. Both KIAS and CIAL struggled for funds during the project stages, especially on account of the intense negative campaign against the Project. Nobody wanted to risk an investment in the Airport project which was widely believed to be a non-starter. However at a time, not even an inch of land was acquired, Federal Bank lent a helping hand by sanctioning a bridge loan of Rs. 10 Crores to KIAS on the basis of a government guarantee. This timely gesture was a confidence builder for the team to move ahead with the project. Sri. C V Jacob, Sri. Yusuf Ali, Sri. P Mohamed Ali and Sri. E M Babu also made handsome contributions to the Airport project in the early stages. The foundation stone for the construction of the Airport was laid on 21^st August 1994, by Sri. K Karunakaran, Hon’ble Chief Minister of Kerala in the presence of Sri. Ghulam Nabi Azad, Union Minister for Civil Aviation and other dignitaries.

Later, during early 1995, when HUDCO sanctioned a term loan of Rs. 98 Crores, the Project tasted a bit of reality. What induced HUDCO to sanction such a huge loan was the determination of Sri. K Karunakaran to provide a government guarantee to HUDCO ably assisted by his Finance Minister Sri. Oommen Chandy andSri. T M Jacob,Minister for Irrigation. Sri. A K Antony, who became the next Chief Minister took the bold step of investing Rs. One Crore, which was the first equity investment of Government of Kerala in CIAL. Sri. N V George also made a huge investment in shares of the Company during 1998.

CHALLENGES DURING CONSTRUCTION

By April 1995, Sri. Kurian and his team were a bit relieved. CIAL had secured the first installment of the term loan, which could be used for commencing land acquisition and also for starting the construction of the runway.

Without waiting for the completion of land acquisition, the tender for the 3400 metre long runway - then second longest runway after the Delhi Airport, was floated during 1994. It was a huge personal risk, but Sri. Kurian was convinced that this was the only way to lead this dream project to a ‘point of no return’.

Terminal Building under construction

Work on the runway costing Rs. 72 Crores was awarded to KMC Constructions Ltd. during 1995. The Contractor did get the jitters, when it became clear to them the kind of terrain they had to deal with. It was completely waterlogged with weak and unpredictable subsoil. Violent monsoons and tropical thunderstorms made it possible to work only for less than six months in a year. Further the land for constructing the runway was not fully available in the beginning and was being made available in bits and pieces. The Contractor was in a tight spot. However, the commitment and enthusiasm of the CIAL team led by Abraham Joseph was contagious – Contractor gradually pushed forward working day and night despite adversities.

Meanwhile the work on the Terminal buildings and other critical structures including Air Traffic Control Tower commenced during 1996. The NAA team on deputation to CIAL led by Sri. N U Bhaskara Rao, deeply involved themselves in all aspects of design and construction and was a source of constant support to the Consultants. Sri. AM Shabeer and Sri. ACK Nair led the Civiland Electrical Engineering teams. The highly complicated IT and Telecommunication network were safe in the hands of Sri. Sunder Raman, while Sri. Ganesan handled all the Mechanical and HVAC works.

Sri. Kurian also stayed close to every detail of the Airport design and construction and made it a point to chair the day-long progress review meetings every Wednesdays and Fridays. He did not hesitate to take quick and tough decisions which were needed to ensure unhindered progress. This was a great motivating factor for the entire team as they could fully focus on the technical aspects leaving all other issues and problems for Sri. Kurian to sort out.

Runway – Construction in progress

Meanwhile, Sri. E K Nayanar, Chief Minister took over as Chairman of CIAL during 1996. The construction picked up momentum during this period and Sri. E K Nayanar ensured that Cochin Airport project received special attention from the State Government and gave his unstinted support to CIAL.

By 1997, substantial land was taken into CIAL’s possession through negotiated settlements. Though there was no concerted opposition from the land owners, land acquisition was still a major cause of worry. A number of land owners were still holding on to their property and challenging the entire land acquisition process in the Court. More than 400 cases were filed against CIAL, which delayed the land acquisition process. There was even an order from the Single Bench of the Hon’ble High Court of Kerala, quashing the entire land acquisition process as null and void. However, CIAL fought all these cases successfully, including a few of them at the Supreme Court of India.

An inspection by Sri. Jayakrishnan IAS, Secretary, Civil Aviation

By 1998, about 100 Contractors were working round the clock and there was visible progress on all fronts. Though availability of funds was still a major problem, all efforts were taken to ensure timely payments to Contractors and equipment suppliers.

Timely completion of the Airport project also required significant involvement by the Ministry of Civil Aviation, Government of India, Director General of Civil Aviation (DGCA), Airport Authority of India (AAI) and Government of Kerala. During the five years of construction of the Airport, CIAL had to deal with three Civil Aviation Ministers, four Civil Aviation Secretaries, four Chairmen of AAI at the Government of India level and three Chief Ministers, four Transport Ministers and five Transport Secretaries at the State Government level and tremendous efforts were required for co-ordination with all the above Agencies. By maintaining a close liaison with all of them, it was possible to minimize delays and to comply with the statutory requirements.

GETTING READY FOR THE INAUGURATION:

By January 1999, the project was inching closer to completion. But the woes of the CIAL team were still not over. Even though runway construction was almost completed, Director General of Civil Aviation raised objections regarding inadequate visibility while landing. There were environmental issues for the location of the DVOR Building in the forest land at Thattekkad. Further, a big agitation had already commenced by a section of people against the closure of the Navy Airport at Wellington Island. However, CIAL team stood its ground with the whole hearted support of Government of Kerala.

Large crowd gathered on the airside on the inaugural day

A view of the Terminal Buildings

Sri. K R Narayanan, Hon’ble President of India inaugurating the Airport in the presence of Sri. E K Nayanar, Hon’ble Chief Minister of Kerala

On the 25^th of May 1999, His Excellency, Sri. K R Narayanan, Hon’ble President of India, announced the historic opening of Cochin International Airport, in the presence of Sri. Sukhdev Singh Kang, Hon’ble Governor of Kerala, Sri. E K Nayanar, Hon’ble Chief Minister of Kerala, Shri. Ananth Kumar, Hon’ble Union Minister of Civil Aviation and several other dignitaries.

Barely a few days after the inauguration, on the 10^th of June 1999, Air India operated the first ever flight from Damam to Cochin, an international operation, amidst a huge crowd gathered in the airport defying all security arrangements to witness this historic moment.

It was also a long-cherished dream coming true for Sri. V J Kurian and his entire team, who left no stones unturned during their long and arduous journey towards the completion of this dream project which had many ‘firsts’ to its credit;

A green field Airport, implemented on a Public-Private Partnership Model for the first time in India,

An Airport built with an unbelievably low cost of Rs. 300 Crores; the project started with a paltry amount of Rs. 20,000/- (USD 400.00) as its initial capital and with furniture and office equipments donated by various organizations, became a reality within a period of five years with an overall investment of Rs. 300 Crores (USD 60 Million) after acquiring about 1253 acres of land belonging to more than 3800 land owners,

An infrastructure project which owed its success to the steely determination, tenacity and perseverance of an individual who dared to dream big and differently, and worked assiduously for the fulfillment of this dream even risking his career prospects. Sri. V J Kurian, who had only 9 years of experience when he was entrusted with this seemingly impossible task, worked with three Chief Ministers, led and motivated a team who came from diverse backgrounds to deliver their best. Nevertheless, Sri. V J Kurian, attributed the success of the project to the whole hearted support of the successive Chairmen and Board of Directors of CIAL, his team and above all to God’s grace.

Cochin International Airport is not just an Airport; it is a symbol of hope in our State. It is a sign that things can actually work if one puts his heart to it. The State of Kerala and in particular the people of Cochin would be indebted to these dedicated men and women who worked to make this dream a reality.

MAKING OF CIAL-PHOTOS

The laying of foundation stone of Cochin International Airport on 21.08.1994