Bangalore, Dec 22 (IANS) A joint house committee of the Karnataka legislature Monday took exception to the huge profits made by Unique Zurich Airport, one of the promoters of the Bangalore international airport, by off-loading 12 percent of its 17 percent equity holding in October 2009.

"The private promoter (Unique Zurich Airport) walked away with an over 1,050 percent return in just four years by off-loading 12 percent (Rs.46.15 crore) of its 17 percent (Rs.65.38 crore) stake at a whopping value of Rs.484.6 crore," the committee said in its report, tabled in the state legislative assembly earlier in the day.

The Swiss-based Unique decided Oct 6 to sell its majority stake to GVK Power and Infrastructure Ltd (GVKPIL). GVK is the private operator of India's busiest airport - the Chhatrapati Shivaji International Airport in Mumbai.

Noting that the private players had set their eyes on huge multiplication of their investment and had cut many corners for the sake of short-term profit, the 50-page report said the government had merely replaced the public monopoly of the state-run Airport Authority of India (AAI) with private monopoly in contrast to the competition in airlines.

"Sweet-coated policies towards building private airports and the watertight concession agreements that are skewed in favour of private players contributed to the factor of huge expected return of 1,050 percent in just four years," the report pointed out.

Larsen and Toubro Ltd (L&T) Infrastructure Development Projects Ltd, the second private partner in the consortium - Bangalore International Airport Ltd (BIAL), also sold its 17 percent equity stake (Rs.65.38 crore) to GVK Dec 6 for Rs.686 crore (Rs.6.86 billion/$148 million) at the rate of Rs.105 a share.

Siemens Projects Ventures (SPV, Germany) is the third private partner in BIAL, with 40 percent (Rs.153.84 crore) equity stake. The AAI and Karnataka State Investment & Industrial Development Corporation (KSIISC) of the state government own 13 percent (Rs.50 crore) each of the total equity (Rs.384 crore).

The Bangalore international airport commenced its operations May 23, 2007 at Devanahalli, about 35 km from the city centre.

"The flawed PPP (public-private participation) policy has allowed the private participant to aim for short-term profit at the cost of the public and it is threatening the very fabric of our state's confidence and good intentions. It is better to enact laws for stalling undue profiteering for the welfare of the state," the report said in its recommendations.

The 21-member committee, comprising 15 assembly legislators and six council legislators, was constituted Sep 18, 2008 by then assembly speaker Jagdish Shettar to examine the lapses and suggest measures for improving the airport to international standards.

The committee, which met for 20 times since Oct 4, 2008, considered and adopted the report at its final sitting Dec 7, 2009.

During its deliberations, the committee members expressed serious concern over the lack of adequate infrastructure facilities at the international airport.