Kannur International Airport ltd gets Rs 50 crore from Centre

Kochi: The Central government has made an investment of Rs 50 crore in the Kannur international airport project through Airports Authority of India against an earlier of promise of taking up 26 per cent equity for Rs 260 crore.

“We have received the payment two days ago,” Kannur International Airport ltd (KIAL) managing director G Chandramouli told Deccan Chronicle.  “We expect another Rs 50 crore soon.”

The Centre had originally agreed to invest Rs 260 crore in the project but later reduced the offer to Rs 100 crore. The State government had claimed that the Centre had in principle agreed to go back to the original proposal and invest Rs 260 crore.

Mr Chandramouli, however, said the company has so far got no indication in this.   The KIAL managing director said the company has got very good response from the public on the sale of its shares after the project made considerable progress in the last one year.

“We had earmarked 16 per cent of the total equity for the public,” he said. “We have already sold 14 per cent, and have got firm commitment for another 2 per cent.” The annual general meeting of the company will soon clear the sale of these shares, he said.

Mr Chandramouli said the company will sell another 5 per cent share to the public if the Central government did not hike its share to 26 per cent. “We are confident that we can sell more shares to the public given the current public mood.”

The heavy monsoon rains this week slightly slowed down the pace of work on the runway, he said. “If we get some relief in September, we will be able to meet our target to open it for test landing in December,” he said.

Six district cooperative banks are understood to have resisted the government's move to make them advance Rs 25 crore each to the troubled cooperative department store chain Consumerfed.

The banks voiced their opposition to the move at a meeting Chief Minister Oommen Chandy convened on Friday, citing instructions from Nabard.

“All the banks have already extended loans to Consumerfed which have become bad debts,” said Manayath Chandran, president of the Kozhikode District Cooperative Bank.

“Nabard has clearly told us not to grant any more money to Consumerfed as they are also likely to become non-performing assets. We are under the control of Nabard, the Reserve Bank of India as well as the State government. We cannot defy an instruction from Nabarad.”

The meeting the Chief Minister convened on Friday asked the banks to give loans to Consumerfed to tide over the financial crisis it has landed itself in.

The store chain owes more than Rs 400 crore to its suppliers, who have since stopped business with it.  

The State cabinet in May had decided to stand guarantee to the loan applications Consumerfed will submit to the six district cooperative banks for Rs 25 crore each.

The banks, however, showed no interest even to give loan application forms to Consumerfed given their experience.

“The presidents of the six banks had met then and decided against advancing more money to Consumerfed. This decision stands as of today,”Mr Chandran said.  

Mr Chadran said the banks have suggested two ways to tide over the impasse. “One, to convene a meeting of bank presidents along with representatives of Nabard and get them agree to the suggestion to give fresh loans. The other way is to loan to primary cooperatives. They can then lend to Consumerfed as they do not come under Nabard,” he said.