Thursday, May 30, 2019

Broke Air India mortgaged land worth Rs 3,775 crore — land that belonged to someone else

New Delhi: Air India has been in dire financial straits for years. That’s not news.

But the state-run flag-carrier was so desperate for funds that it allegedly mortgaged land worth Rs 3,775 crore that had been leased to it by another government entity in violation of the lease terms and without even informing that entity for five full years, investigation by ThePrint has found.
It is a bizarre story that involves not only Air India, the union housing and urban affairs ministry and the consortium of banks led by state-run banking leader State Bank of India, but also the union ministries of civil aviation, finance and law, and the Prime Minister’s Office.

The land — two prime plots in the national capital — is now locked with a consortium of 19 banks led by SBI, also a public sector giant.

The Narendra Modi government has been trying to monetise the plots and use the proceeds to pay off some of Air India’s outstanding debts. But for that to happen, Air India, living off government largesse, or the union housing ministry, which had leased the two plots to the airline, has to first repay the consortium of banks.

The consortium of banks had valued the land at more than Rs 6,000 crore. And Air India, with its debt of Rs 55,000 crore, is obviously in no position to repay the banks to free the land.

It is now being hoped that another public sector giant, NBCC India Ltd, will clean up the mess and monetise the plots.
30/05/19 Moushumi Das Gupta/Print
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