Operators’ dream of exploiting realty in airports nixed

Vahanvati said he would give an opinion only if the ministry came through the Empowered Group of Ministers (EGoM). He went by the precedence set by his predecessor Milon Banerji,who had five years ago on the EGoM’s reference,opined that AAI cannot take such a call. This required an amendment to the Airports Authority of India Act,1994,Banerji had said. The law ministry has endorsed Vahanvati’s stance.

In the recent past,GMR and GVK,who operate the Delhi and Mumbai airports,respectively,have cited resource constraints and have been pitching hard with the ministry to let them unlock the value of the real estate leased to them by AAI.

At present,an agreement between the operators and AAI called OMDA (Operations Management and Development Agreement) restricts GMR and GVK from exploiting more than 5 per cent and 10 per cent,respectively,of the total land for commercial purposes. So,GMR-promoted Delhi International Airport Limited (DIAL) cent has access to just 250 acres of total 5,000 acres leased and GVK-promoted Mumbai International Airport Limited (MIAL) 198 acres of the total 1,980 acres.

When contacted,a ministry official said the opinion was sought primarily to help AAI raise more funds given its plans to modernise 25 non-metro airports across the country. “The change in land use would fetch AAI around Rs 3,000-4,000 crore,” the official said. Were AAI to be permitted,it is only natural that private operators would clamour for a similar dispensation,civil aviation ministry sources said.

In his opinion to the empowered group,Banerji had said AAI cannot lease

any airport property for purposes that are unrelated to passenger amenities. Following this opinion,GMR and GVL were allowed use of land for building hotels and restaurants,facilities that cater largely to passengers.