After TN, Chhattisgarh, Jharkhand seek revenue share when airports are privatised
Chhattisgarh and Jharkhand have come out in support of Tamil Nadu’s (TN) stance that whenever the Central government privatises an airport in a state, the state government should get a share in the revenue.
In a policy note issued earlier this month, Tamil Nadu said that if the state government acquires and transfers land to the Centre-run Airports Authority of India (AAI) free of cost, and if the AAI or the Centre transfers that land to a third party, the value realised or revenue accrued thereby must be proportionately shared with the state government “reflecting the huge investment in land being made by the state government”.
The AAI’s board had in September last year gave the approval to privatise 13 airports, including Trichy in Tamil Nadu and Raipur in Chhattisgarh.
T S Singhdeo, Chhattisgarh’s Minister of Panchayat and Rural Development, Health and Family Welfare and Commercial Tax, said land is a state resource and when the state and the central government come together for developing a project, which is supposed to be an earning project, the state government’s capital is present as a shareholder in terms of the land. “So long as it is in the government sector, things are moving in a particular way, the government of India would be making some revenue and there would be something spilling over to the state government and there would be benefit to the public, so that is fine,” he told PTI.
“Now when you are selling it to a third entity which is a private party, then you are selling the assets of the company, which include apart from the infrastructure, the land also. So, the state government should be given the value of the land,” Singhdeo said.
The sale when it comes about would be by means of a valuation of the entire property which would include the sale price of the land, he noted, adding states should get their share.
“When you are in a joint venture then the investment which has been made, the government of India would put in capital in terms of infrastructure, the state government puts up its capital in terms of its land. So, definitely in every such venture the value of the land should be given to the state government if and when it is sold to a third party which is a private player,” he asserted.
According to the National Monetisation Pipeline issued last year, 25 AAI-run airports have been earmarked for asset monetisation that include Bhubaneshwar, Varanasi, Amritsar, Trichy, Indore, Raipur, Calicut, Coimbatore, Nagpur, Patna, Madurai, Surat, Ranchi Jodhpur, Chennai, Vijayawada, Vadodara, Bhopal, Tirupati, Hubli, Imphal, Agartala, Udaipur, Dehradun and Rajahmundry.
Tamil Nadu’s policy note, issued earlier this month, stated that the value of land — at an appropriate stage — should be converted into equity of the state government in the airport’s special purpose vehicle or an appropriate revenue sharing arrangement should be arrived at before the airport is transferred to a private party.
Asked about Tamil Nadu’s demand, Jharkhand Finance Minister Rameshwar Oraon told PTI, “I agree (with the Tamil Nadu government). Land belongs to the state.” “When it is under the central government, we have no issues, we give land, water and other resources. But if the Centre is handing it to private parties, revenue should be shared with the state government. A policy should be framed in this regard for all the states, not just Jharkhand,” Oraon added.
While the Ministry of Civil Aviation is yet to officially comment on this matter, its officials told PTI that the decision regarding the matter will be taken at the higher levels of the government. The Centre had in 2019 privatised airports at Lucknow, Ahmedabad, Jaipur, Mangaluru,
Thiruvananthapuram, and Guwahati for operation, management and development through public-private partnership (PPP) model.
The Adani group won the bids to run all six airports. (Source: PTI)