The Central government does not favour the position of the Tamil Nadu government on proportionately sharing the value realised or the revenue accrued from the transfer of assets by the Airports Authority of India (AAI) or the Centre, in the event of privatisation of airports.
Replying to a question raised by Ram Nath Thakur in the Rajya Sabha on the issue of certain States having claimed a stake in the privatisation of airports, Union Minister of State for Civil Aviation Gen. (retd.) V.K. Singh alluded to the State government’s proposal and asserted that airports “are not privatised but leased out in public interest for better management, utilising private sector efficiency and investment. AAI remains the owner of airport land throughout the lease period, and land and other assets would come back to AAI after expiry of the lease period”.
Lands for airports had been “acquired and transferred” by the State government “voluntarily and without any condition”, and the airport lands were vested with the Authority in terms of the AAI Act, 1994. So, the State government “cannot stake a claim on revenue” earned by AAI from such lands, irrespective of whether the airports were run by AAI or through a third party by way of a lease.
The Union Minister said the States and their residents were the ‘ultimate’ beneficiaries of enhanced airport infrastructure and facilities created by a “private partner, who operates, manages and develops the leased airport under Public Private Partnership”. Airports had emerged as a nucleus of economic activities with a multiplier effect on the economy of the State, he said. “The revenue received by AAI from the leased airports is also utilised in the development of airport infrastructure across the country,” he pointed out.
According to the current year’s Policy Note of the State Major Industries Department, the State government had also decided that at the “appropriate stage”, it had to be ensured that the value of the lands was converted as equity of the State government in the airport project special purpose vehicle or an appropriate revenue sharing arrangement proportionate to investment was arrived at before any asset transfer took place to a private party.
Coming out in support of Tamil Nadu, the governments of Chhattisgarh and Jharkhand followed suit and claimed a stake in revenue share from the privatisation of airports.
