LandLeasePolicy-LLP 2019
LandLeasePolicy-LLP 2019
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VERSION : 2.O
DATE OF IMPLEMENTATION : 03-09-2019
OFFICE OF PRIME INTEREST : Commercial &Estate Directorate (Estates &Land Record)
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LEASE POLICY
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PREPARED BY
JAFAR ABBAS CHEEMA ADLD ESTATE & LR
ACTING DIRECTOR
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TASHFEEN ASHRAF COMMERCIAL &
ESTATES
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DIRECTOR
APPROVED BY SHAHRUKH NUSRAT GENERAL
PAKISTAN CAA
TYPE OF
DOCUMENT
crvtL AVtATtoN AUTHORtTy ORDER (CAAO)
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DOCUMENT
CONTROLLED
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03/09/2019
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LAND LEASE POLICY
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A. PURPOSE:
41. Pakistan Civil Aviation Authority (PCAA) has been established to promote and regulate the civil
aviation activities and to develop airport infrastructure within Pakistan to ensure safe, efficient,
adequate, economical and properly coordinated air transport services. Airports owned and
controlled by PCAA are mostly sited in cities, which are hub of diversified commercial activities.
It is vital to effectively utilize PCAA land to achieve sustainable economic development, up-
gradation of aviation services, adoption of upcoming aviation technologies, etc.
M. PCAA is obligated under law to generate revenue to meet its increasing requirements of
infrastructure development, maintenance, operational cost and management cost, etc. This
Policy will encourage private sector participation for optimum commercial exploitation of
landside at airports as per the approved airport plans with an assurance that such exploitation
shall not adversely affect future airport infrastructural developments such as expansion of
runway, taxiways, aircraft parking hangers, MRO's, GHSO, Flight Kitchens, Cargo Village,
flying clubs, storage of aviation petroleum products, etc.
B. SCOPE:
81. Thls CAAO is implemented in Civil Aviation Authority and shall be applicable on all leases
executed under this CAAO.
C. CORE RESPONSIBILIW:
C1. For the purpose of this Policy the Director Commercial & Estates is the authorized OPl.
C2. The authorized OPI or duly delegated officer will.- o
C2.1 implement the Policy and oversight the process for grant of Lease of Land and its o
completion process after meeting the codal formalities and ensure timely completion of
process by officials as per the checklist attached Annex-B2;
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C2.2 be responsible for preparation of the tender documents including the standardized pre-
qualification procedure, request for proposal (RFP) issuance, technical/ financial
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evaluation, approval and award and publication of the same through print and
electronic media; and
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C2.3 to prepare and disseminate information for auction of land.
C3. Airport Manager & Concerned Estates Officer shall be responsible to ensure possession of
land to the successful bidder after seeking clearance from the authorized officer and complete
formalities of registration/ execution of Lease Deed and approval of building plan.
C4. PCAA Legal will also be responsible for vetting of Lease Deeds and fulfillment of all codal
formalities before execution of the Lease Deed.
C5. The Price Evaluation Committee shall be responsible for fixation of reserve prlce as specified
herein.
C6. Airport Manager & concerned Estates Officer of the airport shall be responsible to coordinate
with the local authorities of Land Revenue and shall complete the handing / taking over
process of the leased land with successful bidders after meeting all the requirement specified
herein.
D. DESCRIPTION:
D1. OBJECTIVE:
Dl.1 PCAA felt the need to revise the existing land lease in light of vision of the National
Aviation Policy to maintain financial self-sufficiency by revenue generation from land
use and to:
o D3.3 The award of Lease for Mega Commercial Projects shall be subject to submission and
approval of the feasibility report including viable business plan in addition to other
tender requirements. The bidders will also be required to provide the proposed
B flnancing arrangement for the development of Mega Commercial Project.
D3.4 The Lease Deed for specified projects in D3.1 shall be executed on non-judicial stamp
papers. However, possession of land shall be given upon registration of Lease Deed
and completion of all legal and financial conditions as per the checklist appended as
Annex-81.
D3.5 Maximum 10% increase in the awarded land maybe allowed if identified later on in the
possession of lessee or requested by the lessee. Subject to the approval of the
competent authority, the lessee shall be charged 100% of the assessed land price/
value at the time of award of lease in respect of the excess land. However, annual
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Legal I
Representative of Additional Director Representative of Additional Director
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Finance Finance
D6 eBEUlg.!!:
D6.1 Subject to clause D4. the premium amount shall be calculated as follows.-
D6.'1.1 irlega Commercial Projects % [half] of the highest land value/ price offered
by successful bidder;
D6.1.2 Commercial Projects: 1/3'd lone third] of the highest land value/ price offered
by successful bidder. The extended period beyond 30 years i.e. 31"rto 4oth
year and 41'' to 50'n year shall be subject to increase of annual ground rent
of '150% and 100% respectively.
D6.1.3 Aviation Projects: '1l3'd [one third] of the land value/ price for a term up to 30
years. The e)dended period beyond 30 years i.e. 3'1'' to 4O'n year and 41'' to
50'n year shall be subject to increase of annual ground rent of 150% and
100% respectively.
OR
D6.2.2 First installment at the time of award of Lease;
Second after six month of the first installment;
Third shall be paid within 12 months of the second installment;
D7 ANNUAL GROUND RENT:
D7.1 Annual ground rent shall be charged upon award of Lease as advance "Ground Rent",
for the period that shall commence from the date of handing over the possession of the
Lease land and approval of the building plan whichever is later. The annual ground
rent for different categories of Projects shall be as follows.
sR. CATEGORIES
DESCRIPTION
NO OF LEASE
10% of the assessed premium for the 1"' period of 10
years.
100% increase for the 2nd period of 10 year.
Mega
100% increase for the 3'o period of 10 year.
a). Commercial
100% increase for the 4th period of 10 year.
Projects
o- 100% increase for the 5th period of '10 year.
o 150% increase for the
(50 + 05 = 55 years)
extended period of 05 years.
c) 1oo/o oI the assessed premium for the 'l"t period of 10
years.
,"i 100% increase for the 2'd period of 10 years.
Commercial
b). 100% increase for the 3'd period of 10 years.
Projects
$i 150% increase for the 4th period of 10 years.
100% increase for the Sth period of I 0 years.
(30+20 = 50 years)
10% ol the assessed premium for the 1st period of 10
ril
= year.
100% increase for the 2nd period of 1 0 year.
Aviation
c). 100% increase for the 3'o period of 10 year.
Projects
150% increase for the 4th period of 10 years
100% increase for the Sth period of 1 0 year.
(30+20 = 50 vears)
D'10.4 The Addendum to the lease Deed to reflect extension in term will be granted on
willingness of Lessee to pay premium amount [if any] as well as the annual revised
ground rent and approval of the competent Authority;
CATEGORYOF
START UP DATE COMPLETION DATE FOR OPERATIONS
PROJECT
Within six months of Within five year of physical possession and
physical possession and approval of building plan [whichever is later]
approval of the building under clause D3.4. Provided that upon written
Mega plan [whichever is later] request the period may be extended on a
Commercial under clause D3.4 sufficient reason for a term not exceeding two
Projects years.
D11.2 ln case of default of clause D1 1.'1 Non- Utilization charges will be imposed on the
Lessee. Provided that before imposition of any Non- Utilization charge the checklist
appended as Annex-B2 will be submitted for the determination that the cause of delay
in execution and registration of Lease Deed, physical possession or/and approval of
building plan cannot be attributed to CAA officials.
Dl2. NON.UTILIZATION CHARGES:
D12.1 lf the Lessee fails to start the project within the stipulated period as provided above the
Lessee shall be liable to pay non-utilization charges Rs. 100/- per square yard per
month till the time the default is continued.
D12.2 lf the Lessee fails to complete the project for operation within the period provided
above and in the Lease Deed or within the extended period as allowed by the
IEI Authority, the Lessee shall be liable to pay a non - utilization charge of Rs. 3001 per
square yard per month as delay penalty for a grace period of 60 days or/and before the
) notice for cancellation/ termination of Lease Deed and resumption of land as stipulated
in the Lease Deed.
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D12.3 The non-utilization charges will be revised by 100% after every ten years.
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a D13. FINAL APPROVAL:
D13.1 All cases for grant of Lease, will be subject to the approval of the competent authority:
D13.1 .1 PCAA Board for Mega Commercial Projects and Aviation Projects;
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D13J .2 PCAA Executive Committee for Commercial Projects.
D18. COMPLIANCE:
D18.1 Lessee's shall be required to comply with all laws, rules, regulations including the rules
and regulations of the Civil Aviation Authority as may be amended from time to time.
D18.2 ln case of breach / violation of any clauses of this Policy or the Lease Deed, PCAA
shall take action as per the terms conditions of this Policy and Lease Deed,
accordingly.
E2 PEE!NIL!.oNS:
E2.1 "Airport" means the airport notified by the Federal Government under sub-section (ii)
of Section 2 of Pakistan Civil Aviation Authority Ordinance No. XXX of 1982',
E2.3 "Approval " means the approval of PCAA Board, the PCAA Executive Committee or
the Director General as the case may be;
E2.4 "Authorized OPl" means an Officer of PCAA, who is duly authorized, by the orders of
the Director General/ PCAA Executive Committee/ PCAA Board to control, manage,
administer the PCAA Estates and to exercise certain powers relating thereto, delegated
a- or otherwise;
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L) E2.5 "Aviation Projects" means lease of land for aeronautical development;
rv E2.6 "Commercial Projects" means lease of land for projects other than Mega Commercial
ut Projects for non-aeronautical development;
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g) E2.7 "Landside" means any site that does not have direct access to the airside operation
area,
E E2.8 "Lease" means lease of land for Aeronautical Development and Non-Aeronautical
Development as the case may be;
E2.9 "Lessee" means any person under a valid Lease Deed, as specifically defined in each
individual lease Deed;
E2.10 "Master plan & layout plan" means the approved scaled drawing of the airport,
indicating current and proposed land use for each identifiable segment as approved
and/or modifled by the Authority from time to time;
E2.11 "Mega Commercial Project" means lease of 06 acres or above of land for non-
aeronautical development for large-scale venture or project[s] including chain of four
star and above Hotel[s], Convention Centre, lnternational Standard State of Art Mall
with all commercial and entertainment options, AmusemenU Theme Parks, Expo
Center, Corporate Tower, etc. to generate sustainable economic activity, with the
involvement of both public and private stakeholders;
E3. REFERENCES:
Nit
!MPLEMENTATION
This CAAO shall be implemented with effect from 3d September 2019 and supersedes CAAO-
CMER-001-1 .0 dated 1 't March 2012.
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(SHAHRUKH NUSRAT)
DIRECTOR GENERAL
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Dated: - PAKISTAN CIVIL AVIATION AUTHORITY UI
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(TASHFEEN ASHRAF)
Director Commercial & Estates
ANNEX . A
1. Agricultural land will only be leased through public tender/open auction or local quotation with the
approval of Competent Authority as follows:
(a) Upto Rs. 10 Million of total bid amount with approval of Director Commercial & Estate
(b) Morethan Rs. 10 Million of total bid amount wjth approvalof Director General CAA.
2 Agricultural land will be leased on consideratjon of annual rent and the rent shall be increased 5%
per annum.
3 The reserved rentals value of the agriculture land shall be fixed per acre as per the customary norms
of the respective District Revenue Authoritjes.
4. Agricultural land shall be leased for a term of five (5) years with an option to be renewed for another
term up to five years. Such extension in the term of lease shall only be on the written request of
lessee 06 months before expiry of the initial term, i.e. 5 years and the lessee shall have to participate
in tender/ auction /quotations as the case may be with first right of refusal to the sitting lessee to
match the highest bad.
5. The possession of agricultural land will only be handed over upon execution of the lease deed.
(a) Barren or uncuttivated for the first time shall be leased on a condition that lessee shall make
the land cultivable at its own cost. PCAA will not charge rent for first three years of cultivatron
however, the lessee will be responsible to pay all revenue cess, electricity and water charges
o- (b) Earmarked for plantatron of an orchard/ fruit trees will be leased on a condition that lessee wtll
{t do the plantation of orchard at its own cost, however PCAA will charge rent upon having
availed the first yield of the orchard.
(a) Surplus grass and trees at Airports shall be sotd out to the highest bidder through open
auCtion.
(b) Reserve Price for the auction shall be fixed by respective Airport N4anager/ C.O.O after
obtaining rates from concerned Agriculture/ Forest department.
(c) Director Commercial & Estate shall give the final approvat for acceptance of highest bid.
lnstructions: Fill in the requested information and place a check in boxes for which
requirements have been satisfied.
PART .A
l. Basic lnformation:
1 . Airport-
2. Approval:
tr Board
tr Executive Committee
3 Date of Award:-
4 Lessee:
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D lndividual I
tr Firm/partnership o
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Company o
Joint venture (r
tr Special purpose vehicle UJ
TyDe of Lease:-
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tr Aeronautical
tr Non-Aeronautical E
6. Type of Project:-
O Aviation:
tr Commercial
tr Mega Commercial
tr Business plan
tr Feasibility RePort
8. Premium Amount:-
tr 1"i lnstallments
tr 2nd lnstallment
tr 3'd lnstallment
10. Location On
11. Term: Years With _Option (s) of_ Years(s)
tr The lease is consistent with the Airport Layout
Plan and Master plan approved
by the Board on the following date
tr The rease is environmentary compatibre with
airport operations.
[. Mandatory Req uirements:
tr AnnualGround Rent @ per year)
ilt Lease Deed
tr Registered
Page of
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LAND LEASE POLICY 9
CAA
Signature
Printed Name
Designation Title
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ANNEX. 82
lnstructions: Fill in the requested information of officials and place a Checklist
check in boxes for
which requirements have been satisfied and ensure that there is
no default or aeuy on part
of CAA Officer/ Officials.
l. lnformation:
4. Name of Lessee:_
5. Type of
E Aeronautical
E Non-Aeronautical
6. Type of Project:_
E Aviation:
E Commercial
f,l Mega Commercial
E Business plan
tr Feasibility Report
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etc.
Building Plan with complete drawings
C)
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8. Date of approval of Building plan and drawinqs:
F
o tr Afler six months
'age 4of
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LAND LEASE 2019
cAA
lll. Gertification
OR
Designation Title =
ANNEX -C
lnspection Form
(after every '12 months)
lnstructions: Fill in the requested information and place a check in the boxes for which the
requirements have been satisfied.
l. MandatoryRequirements:
ll. AppraisalRequirements:
f, Encumbrances:_ o.
l Third party rightr_ o
tr
tr
Default:
date:_
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Non completion notrce
Non Utilization Charges date:_ t.
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tr Termination notice: F
lll. Renewal/ Extension request date:_ and re-calculation of premium
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E DC value + 05 %
E
B FBR value + 05 o/o
E Annual Ground Rent @_ per ( veaO
lV. Certification
Signature
Printed Name
Designation Title