Air India draws up plans for possible Vasant Vihar exit
Air India has submitted a plan to the aviation ministry detailing how it would help employees occupying 676 of the 810 flats in the airline’s housing complex in south Delhi’s tony Vasant Vihar neighbourhood to find alternative accommodation if they were asked to vacate the apartments, two officials familiar with the matter said on condition of anonymity.
Air India has been issuing auction notices relating to properties it owns across the country, including the iconic 23-story building located in Nariman Point in Mumbai. The plan for the Vasant Vihar housing complex was discussed with the civil aviation ministry, which said that in case the government went ahead with its privatisation, the property would need to be vacated before being sold.
The officials cited above clarified that the proposal for the Vasant Vihar colony did not mean its redevelopment was finalised - it was just a plan that could be implemented if the privatisation goes through. To be sure, a previous attempt to sell Air India flopped last year when no one bid for the state-owned airline, burdened by heavy debt and accumulated losses, and there’s no clarity on a revival of the sale, meaning the property divestments are likely a distant exercise .
Press Trust of India (PTI) reported in January, citing an official it didn’t name, that the government expected to raise $1 billion from the sale of the airline.in fiscal 2019-20.
“A meeting was held regarding the issues relating to Air India properties at Vasant Vihar and Baba Kharag Singh Marg, New Delhi. In the meeting, it was pointed out by joint secretary that in case of disinvestment or demolition of property at Vasant Vihar, alternative arrangements for providing accommodation to employees of Air lndia is required to be explored and hence, Air lndia was advised to work out modalities for accommodation facility to the employees living in Vasant Vihar colony...and furnish the same to the Ministry of Civil Aviation,” Meenakshi Kashyap, general manager of Air India, wrote in a letter to the ministry on April 11.
In the proposal, a copy of which has been seen by HT, the airline said employees will be advised to take flats on rent. Air India would be willing to enter lease agreements directly with the owners and also provide a subsidy of between Rs 5,000 and Rs 25,000 based on the designation of the employees, it said.
Property consultants in Vasant Vihar said the value of the 30 acres of prime land owned by Air India in the neighbourhood could range between Rs 3,000 crore and Rs 4,000 crore. but height restrictions on buildings because of the airport being in close proximity could affect the value.
“It is definitely a high-value, prime land and in this area a 400-yard plot is sold at ₹ 6-7 lakh per yard but as the size gets bigger, the per-yard value starts coming down. But we feel height restriction will define the value of the property as because of the airport, the new property may not be that high, thus reducing the value,” said Dipesh Garg of SanD advisory, a real estate appraiser based in south Delhi.
Air India has said that it will form a committee comprising representatives of its personnel, properties and facilities, and finance departments to carry out a market survey to identify the areas where safe and suitable accommodation is available for rent or lease.“The committee will be asked to find the accommodation, as per the current entitlement of the employees, in terms of the area of the flat. Wherever applicable, Brokerage Charge will be borne by the company. At the time of vacation of the colony accommodation, the transportation of household goods to the new accommodation in terms of the transfer policy of the company may be considered,” the airline said in its proposal.
According to residents of the colony, they have not received any notice to vacate but are aware that a plan has been submitted to the ministry.
“It will be very difficult to vacate these 676 flats especially when several of them have no accommodation in Delhi or are on transfer from other bases, as also their children are studying in the school situated in the colony or in neighbouring area,” the airline said in the proposal.
Last month, the airline issued auction notices for 23 properties in 14 cities across the county including a holiday home in Lonavala and flats is Delhi’s Asiad village and land in cities like Mumbai and Trivandrum.
Last year, the national carrier had put up some apartments in Mumbai, Bengaluru and Ahmedabad, as well as properties and land parcels in Kolkata, Pune, Bhuj, Goa, Gwalior, Trivandrum and Nashik for auction. So far the airline has generated about ₹400 crore from these properties.
According to an Air India official familiar with the matter, the money generated from these sales will go to a Special Purpose Vehicle (SPV) called Air India Asset Holding Limited.
The government has already decided to transfer ₹ 29,000 crore of the total ₹ 55,000 crore debt of Air India to this SPV.