AAI asks for exemption from Cabinet on lease permission

The Airports Authority of India (AAI) has asked for selective exemption from the order to seek permission from the Union cabinet before the sale or long-term lease of any land of the government or a government-controlled statutory body.

The state-owned airport operator is estimated to have a land bank of 45,000 acres across all airports.

The Cabinet Secretariat has asked all ministries to put up proposals for sale or long-term lease of land belonging to the central government or its agencies before the Union Cabinet, the Cabinet Committee on Economic Affairs or the Cabinet Committee on Infrastructure for approval.

This was done after Prime Minister Manmohan Singh asked the cabinet secretariat to frame a comprehensive policy to stop quiet transfers of government land to private parties.

"We have asked for an exemption to lease out land for a period of up to 30 years without taking permission from the government," said a senior AAI official, who did not want to be identified.

The official said AAI had a lot of land across all airports in the country and they get into various short-term leases. Taking permission for all would be time-consuming.

"Our

act allows us to lease out land. If we have to go to the Cabinet for the clearance for all such agreements, the whole procedure will be delayed. Getting Cabinet approval takes its own time," the official added.

AAI manages and operates 126 airports - 16 international, 89 domestic and 26 civil enclaves. Of the airports it owns, only 14 make profits. The authority plans to increase the number of profit-making airports to 25 by the end of this financial year.

AAI also plans to privatise 15 of 40 non-operational airports on a public-private partnership basis to make these function again.

The airports to be given to private companies are in Rajasthan, Orissa, Bihar, Uttar Pradesh, Jharkhand and the northeast states.

The mini ratna company registered a profit of Rs 712 crore (Rs 7.12 billion) in 2009-10, on revenue of Rs 4,615 crore (Rs 46.15 billion).

The airport operator also expects its annual earnings to grow by Rs 100 crore (Rs 1 billion) through the user development fee collection at various airports.

The authority has also asked for permission to raise Rs 5,000 crore (Rs 50 billion) through a debt-free infrastructure bond. It has been declined permission to do so by the finance ministry in the past.