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The KCA backed out of the series after the state government decided to conduct an army recruitment rally at the Greeenfield International Stadium, Karyavattom, during the same period.
"If the state government doesn’t intervene, the Greenfield Stadium will soon become unusable,” KCA president Sajan Varghese and secretary Sreejith Nair said in a joint statement.
Sreesanth, who returned to competitive cricket in last month’s Syed Mushtaq Ali Trophy after serving a seven-year ban for his alleged involvement in the 2013 IPL spot-fixing scam, had a base price of Rs 75 lakh in the preliminary list.
Pacer Basil Thampi has opted out citing personal emergency.
Sreesanth cleaned up Pondicherry opener Fabid Ahmed with a superb delivery in his second over.
The 37-year-old pacer is set to make a return to competitive cricket after a gap of seven years in the Syed Mushtaq Ali Trophy on Monday.
Sreesanth exuded confidence that the Kerala team led by Sanju Samson will do well in the Mushtaq Ali Trophy which begins in Mumbai on January 10.
Sanju Samson will lead Kerala in the T20 tournament which begins in Mumbai on January 10.
The list has two outstation players in Robin Uthappa and all-rounder Jalaj Saxena.
The decision has forced Kerala Cricket Association to postpone its maiden T20 league scheduled to begin in Alappuzha on December 17.