Following the discovery that some of Air India’s assets are not owned by the carrier but are on a 99-year lease from the government, the Centre has decided to sell some of its real estate properties directly to expedite the state-owned airline’s divestment, according to a media report.
Two such properties in Delhi, a 4-acre land near Connaught Place and a residential colony in Vasant Vihar, are found to be owned by the urban development ministry, reported The Economic Times.
“Properties, where the government has the ownership, will go back to the government, which will sell it on behalf of Air India,” an aviation ministry official told the financial daily.
While the residential colony will be handed over to National Buildings Construction Corporation, the plan for the land has not been decided yet.
The government has decided on a strategic disinvestment of the loss-making Air India. It is looking for reputed investment bankers, merchant bankers, financial institutions and banks for providing advisory services and managing the strategic disinvestment process. All applications for the same have to be submitted by October 12.
Air India saddled with debt
Air India was directed to monetise its assets across the globe and earn about Rs 5,000 cr that would be used to repay its debts worth Rs 52,000 crore.
Under a turnaround plan approved by the previous UPA regime, Air India is to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds. The ten-year bailout package began from 2012.
So far, the embattled carrier has received around Rs 26,000 crore under the package.
The Cabinet Committee on Economic Affairs (CCEA) gave its in-principle nod for the strategic disinvestment of the airline in June 2017.
Subsequently, an Air India-specific alternative mechanism was set up to guide the process. The airline is also planning to take short-term loans worth up to Rs 3,250 crore to meet "urgent working capital requirements".
‘Before privatisation, clear our arrears’
The Indian Commercial Pilots' Association (ICPA) wrote a letter to Civil Aviation Minister A Gajapati Raju demanding the release of their "illegally withheld 25 per cent flying allowances and related allowances before disinvestment and/or privatisation".
The national carrier had resorted to salary cuts in 2012 for its employees as part of its turnaround plan. Since then, arrears have been accumulating even as a certain section of employees accepted revised pay scales.
The ICPA, which claims to have more than 1,000 members, represents the pilots of narrow-bodied planes of Air India.