NEED FOR FOR LAND REGULATIONS OF AAI

REGARDING LEASE, TRANSFER AND ALIENATION OF

LAND AND BRINGING MODIFICATION IN THE
EXISTING PROVISIONS OF AAI ACT FOR
COMMERCIAL UTILISATION OF LAND
 AIRPORTS AUTHORITY OF INDIA A MINI RATNA PSU UNDER
MOCA HAS 125 AIRPORTS ACROSS INDIA AND OWNS ABOUT
56000 ACRES OF LAND AT 166 LOCATIONS
 THE PRESENT PROVISIONS OF AAI ACT 1994 AMMENDEMENT
2003 ALLOW UTILISING ITS VAST AND PRECIOUS LAND
RESOURCES PRIMARLY FOR ITS CORE FUNCTIONS AIRPORTS
AND PASSENGER FACILITIES ONLY THUS RESTRAINING AAI
FROM PUTTING ITS LAND TO COMMERCIAL USE AND FOR
TIDING OVER THE ENORMOUS RESPONSIBILTY OF ABSORBING
LOSS MAKING AIRPORTS AND FOR MAINTAINING THEIR
SUSTAINABILTY ESPECIALLY TO IMPLEMENT THE PROVISIONS
OF THE NEW CIVIL AVIATION POLICY OF THE MOCA.
 MOCA SUGGESTED THAT A SUITABLE MODIFICATION IN THE
AAI ACT BE MADE TO UNLOCK THE COMMERCIAL POTENTIAL
OF AAI LAND AND FINALISE LAND REGULATIONS POLICY TO
EXPEDITE VARIOUS TYPES OF LAND LEASE ,TRANSFER
&RELATED FUCNTIONS AND EASE OF PROCESSING AND
APPROVALS
Position prior to directives received from Cabinet
Secretariat

Prior to directives of Cabinet Secretariat conveyed vide

letter dated 21.3.2011, received from MoCA vide letter
dated 1.4.2011, the land was being allotted/leased/
licensed for a maximum period of 30 years by AAI Board in
exercise of the powers as per AAI Act, 1994 (Chapter-IV,
Section 21).
Directives of Cabinet Secretariat-Post 2011 on Land Allotment

• As per directives of Cabinet Secretariat(21.03.2011), specific

approval of Cabinet is required in each case of sale or long
term lease of land belonging to the Govt. or Govt. controlled
Statutory Authorities.

• Cabinet Secretariat vide letter No. 511/2/1/2010-Cab.III dated

21.11.2011 directed all concerned ministries and statutory
authorities to bring policy proposal covering all other types of
land transfer (excluding transfer of land from one Central Govt.
Dept/Ministry to other) to Cabinet expeditiously to obviate the
need for the ministry to come to Cabinet or each land transfer
proposal as a case by case basis.
 Draft Land Regulations submitted to AAI Board

• AAI appointed Dr. K.N. Chaturvedi, Advocate, Supreme

Court, former Secretary to the Govt. of India, Ministry of
Law and Justice and Member Secretary, Law Commission
of India, as Consultant for drafting the Land Regulations of
AAI. Consultant submitted draft Land Regulations in March,
2012.

• First draft AAI Land Regulations were presented before the

150th AAI Board Meeting held on 25.10.2012. The Board
desired to obtain the Land Regulations of Railways and Port
Authorities and incorporate the relevant provisions in AAI’s
Land Regulations.

• The same draft AAI Land Regulations was re-submitted to

AAI’s 154th Board Meeting held on 08.05.2013.
 Revised Draft Land Regulations duly incorporating the
relevant provisions of Land Policy -2014 of
Ministry of Shipping
• MoCA vide letter dated 29.5.2014 desired, AAI to adopt broad
structure/outline of approved Land Policy-2014 of Min. of
Shipping in proposed land policy of AAI.
• The suggested provisions of Land Policy-2014 of Min. of
Shipping was incorporated and presented to AAI Board in 159th
Board Meeting held on 30.6.2014.

• The draft AAI Land Regulations was approved by AAI Board in

164th Meeting held on 26.3.2015 and recommended for
forwarding the same to MoCA for approval of Central
Government.
• Various sections of the above draft were apprised to the
Secretary ,MoCA and after incorporating the necessary
modifications it was suggested that the sections/language of
the document be re drafted/refined by a legal professional.
List of Chapters &Contents in the Draft Land Regulations (Re drafted)
Chapter I-General Provisions
Application,Scope &Definitions

Chapter II –Acqusition of land by AAI

By way of Transfer from Govt or Direct Purchase

Chapter III-Transfer of Land by AAI

Permanent Teransfer ,Lease &License,

Chapter IV –Revenue Sharing

Market Value &Reserve Price

Chapter V-Manner of Soliciting Bids &Entering in to Contract for Land

Transfer

Chapter VI-Annual Lease Rental

 Chapter VI-Annual Lease Rental

Chapter VII–General Exceptions

Entering in to Contract for temporary or permanent lease ,transfer or swapping with out
soliciting bids or for JVC,Centre for Perishable Cargo,MRO,FTO,non commercial activities
etc

Chapter VIII-Termination &Dispute Resolution

Chapter IX–Miscellaneous
Appointment of Estate /Eviction officers ,Un authorised occupants ,Right of
Way Permission
Types/Purpose of Land Allotment on Lease Types of Charges

1. Fuel Companies supplying fuel to Airlines Airport Location specified

Land Lease Rent /sq.met
/year &throughput charges
with annual escalation
2. Fuel Stations /Petrol Stations outside operational Airport Location specified
area for general supply Land Lease Rent /sq.met
/year &Royalty with annual
escalation
3 .Non –scheduled operators (NSOP) housing & Airport Location specified
maintaining their own small aircrafts and helicopters Land Lease Rent /sq.met
inside hangers either constructed by AAI or by them /year &Royalty with annual
escalation &RNFC
4. Flying Training Institutes /Clubs/Schools Airport Location specified
/organisations Land Lease Rent /sq.met
-Central &State Govt aided /Edu.Societies/NCC /year &Royalty with annual
-Private /Commercial Organisations escalation &RNFC
5. Parking of Ground Handling Vehicles/Ladders Airport Location specified
/Equipment of Scheduled Airlines Land Lease Rent /sq.met
/year with annual escalation
Types/Purpose of Land Allotment on Lease Types of Charges

6. Maintenance ,Repair and overhaul (MRO s) Airport Location specified

Land Lease Rent /sq.met
/year &Royalty with annual
escalation &RNFC
7. Cargo Establishments Airport Location specified
Land Lease Rent /sq.met
/year &Royalty with annual
escalation &RNFC
8. Metro Railway Perm,Temp Transfer&ROW

9 .Defence-IAF,Indian Navy, Army ,BSF, ICG,NSG,CISF Airport Location specified

Land Lease Rent /sq.met
/year at 50% of normal rate.
10.CPWD ,IMET, Postal ,DGCA,BCAS ,Customs offices -as above-
&Res.Qrs
11. Police Station & Electrical Sub station As per case specific policy

12.Airport Health organisation /State Health Dept -do-

13.State Civil Aviation/Govt Establishmnt -do-

Types/Purpose of Land Allotment on Lease Types of Charges

14. Porta Cabins Airport Location specified

Land Lease Rent /sq.met
/year &Royalty with annual
escalation
15. ONGC, Airport Location specified
Land Lease Rent /sq.met
/year with annual escalation
&RNFC
16. Schools -As per case specific policy-

17. Hotels Airport Location specified

Land Lease Rent /sq.met
/year &Royalty with annual
escalation
18. Other commercial establishments -as above-

19. Airport Construction sites As per case specific policy-

20. Short &very short term permission As per case specific policy-
 Modification in the Existing Provisions of AAI Act
Background &Justification (submitted to MOCA)
 Airports have historically been understood as places where aircraft
operate, including the runways, control towers, terminals, hangers and
other facilities which directly serve aircraft, passengers and cargo.
 The aim of the airport authority has been to process passengers as
quickly and efficiently as possible and the traditional view had been that it
exists to ensure the efficient movement of passengers between one
destination and the commercial issues have been a peripheral concern to
the needs of aeronautical operations.
 Globally this historical understanding is giving way to a broader, more
encompassing model which recognizes the fact that along with core
aeronautical infrastructure and services, airports have to expand beyond
the boundaries of traditional business in the terminal and diversify by
developing the facilities including office complexes, business parks and
free trade zones; distribution and logistics centres; sports, cultural and
entertainment amenities; shopping centres; and medical services.
 The evolution of these non-aeronautical functions and commercial land
uses has transformed numerous city airports into airport cities or
Aerotropolis.
 Over the past 20 years or so, airports have evolved from being
infrastructure providers into sophisticated, business-oriented service
providers which act as a catalyst and magnet for sustaining wider
economic active income, investment and tax revenue leading to better
facilities for aviation stakeholders and balanced regional growth in the
surrounding area – in terms of increase in employment
 The National Civil Aviation Policy 2016 strives to generate non-aeronautical
revenue in excess of 35% of the airport’s total revenue for AAI airports with
throughput above 0.5 mppa and has identified that there are restrictions
on the use of land allocated for commercial use of airport.
 In order to maximize the revenue it is required to unlock the potential of
the land on city side by liberalising the end-use restrictions for existing
(excluding PPP) and future greenfield and brownfield airports of AAI and
future greenfield and brownfield airport projects under PPP.
 In order to implement the recommendations of the NCAP it has been felt
that the Airports Authority of India Act may be amended.
Statement of Objects and Reasons.-
 The capital required to develop and maintain an airport is generated from
two sources: aeronautical charges and non-aeronautical or commercial
revenues using their facilities.
 Across the world, the trend is towards a very high percentage, ranging from
60 to 70%, of the total revenue of airport operators being generated from
non-aeronautical sources at major airports.
 In India, although these services are now also being provided by private
agencies, the comparable figure for AAI airports is just 24%. Out of the 125
airports managed by AAI, 94 airports are operational (24 airports used only
by Non-scheduled operators), of which only 13 are profit-making and rest
are loss-making airports.
 The non-aeronautical revenues so generated shall help in cross
subsidizing and rationalize the aeronautical charges and to meet the
facility modernization and infrastructure expansion needs but also to
develop and maintain large number of loss-making airports in the
country to serve the social obligations of enhancing regional connectivity
including airports in remote and inaccessible areas especially the North
East, hilly, island regions and tourism places. This shall help in National
Civil Aviation Policy endeavors to take flying to the masses by making it
affordable and convenient.
 The Airports Authority of India (Amendment) Bill, _____ shall, inter alia,
seeks to enable –

 prepare scheme or schemes for use of land in conformity with the provisions of
the Act;

 develop AAI land for commercial use as may be entrusted to it by the Central
Government for the purpose of generating revenue by non-aeronautical
measures;

 provide impetus to raise revenue from non-aeronautical commercial sources.

 Rationalisation and optimisation of the airport charges.

 undertake beautification of airport surroundings and provide modern amenities
to users, etc. through the commercial development route.
The Bill seeks to achieve the aforesaid objectives.