AAI to monetise 5% of land assets in fiscal 2018-19
Airports Authority of India (AAI) will begin the process of selling about 2,750 hectares of land, or 5% of its land assets, in the year starting April 1, as the state-owned airport operator seeks to boost its non-aeronautical revenue, chairman Guruprasad Mohapatra said.
Mohapatra said that the company will start the process by leasing land to hotel chains and has already identified land at airports in Lucknow, Raipur, Tirupati, Jaipur, Bhubaneswar, Varanasi, Kolkata and Amristar for development in the upcoming fiscal.
“We have floated RFP (request for proposal) for construction of hotels at Amritsar, Bhubaneswar and Kolkata airports, which would have a lease period of 60 years, Mohapatra said, adding that AAI has received interest from companies which want to develop a five-star hotel and a three-star hotel at Bhubaneswar.
“This will have to be approved by the cabinet and aviation ministry,” Mohapatra added.
According to a real estate consultant, AAI could fetch about ₹17,000 crore through its land monetisation exercise. It is expecting between ₹2 crore to ₹2.5 crore per acre, the consultant, who did not want to be identified, added.
A hectare is 2.47 acres. However, the consultant was sceptical about the airport operator’s ability to monetise its entire land bank.
“These markets do not have sufficient depth to absorb such huge land parcels (for commercial usage). So they (AAI) will per- haps be able to monetize only about a third or one-fourth of the total land bank in the smaller cities and towns, subject to various conditions including suitability of land or restrictions of usage over these lands,” the person cited above said.
AAI has also started construction of multi-level car parks with commercial facilities at Chennai, Ahmedabad, Pune Calicut, Jaipur and Amritsar.
The finance minister had in the 2018 budget announced a change in rules to allow monetization of AAI’s land assets.
Airports Authority of India currently owns more than 55,000 hectares of land at airports across the country.
The public sector airport operator expects revenue of ₹13,200 crore in 2017-18, against an expenditure of ₹9,900 crore, Mohapatra said, adding that the company’s profit after tax is expected to be around ₹2,100 crore during the period.
AAI also expects its non-aeronautical revenue to rise by 30% to about ₹2,769 crore during 2018-19, against ₹2,130 crore during the last fiscal, Mohapatra added.