Five airports sold for Rs 63 crore to Reliance

How much would you pay for five airports spread over 601 hectares of land? It cost Reliance Airports a sum of Rs 63 crore to get a 95-year lease for five airports in Maharashtra.

Just 10 days before the model code of conduct kicked in in the poll-bound state, the Maharashtra government cleared the privatisation of five small-town airports -- in Baramati, Nanded, Latur, Osmanabad and Yavatmal.

Reliance Airports beat other bidders to win the bid for Rs 63 crore for a 95-year lease. For all five airports. This despite the fact not just the Opposition, but several of the state government's own departments, protested that the price was too low.

The government says it had no choice as this was the best price it could get. But many questions remain unanswered about the deal, which has now been challenged in court.

Documents available with NDTV prove the decision to give the airports to Reliance was taken amid fierce opposition from virtually every government department involved.

The loudest protests were from the Planning and Revenue Departments. The planning department said there was no way to justify handing over 601 hectares land for just Rs 63 crore, that too for 95 years.

The Finance Department too said the offer price was too low as the land and assets together were valued at Rs 350 crore.

The Revenue Department pointed out that no government land could be leased out for more than 30 years.

The only support came from the Industries Department and the General Administration Department, which come directly under the Chief Minister. These departments overruled the objections and the Cabinet cleared the bid.

The Maharashtra government says in its defense that this is part of its attempts to allow private players to develop loss-making airports in smaller towns.

"In my view it is better that these airports are put to use rather than lie unused. Some of the airports in Maharashtra have been lying unused for 20 years. The company which has taken over will have to invest in it and develop the airports," said Ashok Chavan, Chief Minister of Maharashtra

The Maharashtra government also claims that the bidding was transparent and of the eight short-listed companies, Reliance Airport Developers Limited made the highest bid

''Assessing the lease by looking at the market price is not right. The land has not been given for development. Reliance has to run and expand these five loss-making airports of which three are not operational,'' said sources in Reliance Anil Dhirubhai Ambani Group.

But several questions still remain:

· Not all airports are loss making. The government had spent Rs 339 crore between 1995 and 2007 to develop the five airports, two of which now operate regular flights.

· If the government was planning to sell them off, why did it put in more money?

· If the bid amount was so low, why the haste to clear it by holding seven meetings between June and August 2009?

· And why was the 95-year lease offer not made clear upfront in the advertisements, which could have perhaps attracted more bidders and a better price?

Now, the entire deal has been taken to court, which may be the final arbiter in the controversy.