No such thing as free land: Tamil Nadu draws up compensation policy if airports are privatised

Industries Minister Thangam Thennarasu presented the policy note in the Assembly last week. Late last year, finance minister Palanivel Thiaga Rajan had also raised the subject during a review of the Union Budget.

Explaining that there was nothing unusual about the state government’s stance, Rajan told The Indian Express that the DMK was “a party following Dravidian ideals”. He added, “All our actions, let it be Bills or statements, follow that philosophy. Ever since we came to power, we have been consistent about this stand, about the significance and value of ‘land’, not to let any public land go encroached or abandoned or alienated.”

Rajan said government land should be used for equitable social and economic development. “That is why the DMK government is moving towards a comprehensive policy on land leases in order to address the challenges faced in leasing government land and to put in place a fair and transparent manner for leasing of government land,” he added.

At the Union Budget review meeting, where Union Finance Minister Nirmala Sitharaman was also present, Rajan had said, “In the past, the Government of Tamil Nadu has given land for free or at concessional rates for many central public sector undertakings and projects of the Union government. During the privatisation of such organisations, the state government should be justly compensated for the land either through payment of land cost at current market value or through an equivalent equity stake in the new entity. Further, to incentivise states to show more interest in projects of the Union government, I request that a policy may be formulated in this regard and announced in the Budget.”

The latest government note explains how such a policy should be executed. Pointing out that the state’s policy in 2007 was to acquire land and hand it over free of cost, “without any encumbrance,” to the AAI for the construction of new airports, or airport expansions, the policy note said land cost forms the bulk of the overall cost of a project.

“The AAI is actively pursuing the policy of privatisation of airports. Therefore, a decision has been taken that in the event, the state government acquires and transfers the land to AAI free of cost and the AAI or government of India transfer the assets 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,” read the note presented in the House. “It has also been decided that at the appropriate stage, it has to be ensured that the value of the land should be converted as equity of the state government in the Airport Project Special Purpose Vehicle or an appropriate revenue sharing arrangement proportionate to investment is arrived at before any asset transfer takes place to a private party.”

Even though the latest policy document refers to airport land, the state applied the principle last December when it objected to the sale of BSNL properties worth about Rs 1,250 crore in Chennai. The state revenue department told BSNL it could not monetise the properties without the state government’s consent as the land on which they stand was originally acquired by the state and allotted to the telecom department for a specific purpose. The department reminded the telecom company that the assets cannot be sold or used for any other purpose.

The latest document comes at a time several airport projects in the state are in the development stage. A few examples — administrative sanction has been granted for land acquisition of 10.72 acres of patta land and alienation of 51.57 acres of poramboke land for the expansion of Vellore airport; a runway expansion project at Coimbatore airport; some 60 acres of land acquired for Chennai airport; and 462 acres of patta land acquired and handed over for Madurai airport expansion (remaining 171 acres are in the process of being acquired). Airport development and expansion projects in Salem, Trichy, Thoothukudi, and a proposed airport in Hosur are among the recent airport projects that are either in progress or have been completed.

Retrieving encroached land

Since coming to power last year, the DMK government has been taking assertive steps to retrieve encroached or abandoned land. Quoting the state government’s “Tamil Nilam” database, the 2021-’22 state Budget said over 2.05 lakh hectares of government land had been encroached upon.

“To improve management of the public land, an advanced Government Land Management System will be created that will contain full details of all government land. This will prevent state’s assets from being used inefficiently, misused, or even diverted,” read the Budget document. The government allocated Rs 50-crore special fund to retrieve and protect government land, including water bodies, from encroachment.

Of all the government departments, the Hindu Religious and Charitable Endowment (HR&CE) department may have done the most to retrieve public land — official figures show that the department retrieved over Rs 2,000 crore worth of encroached temple land across the state in 11 months.