Delhi International Airport questions CAG audit
MDT/PTI 04 June 2012

GMR-led DIAL said it won the bid to development Delhi airport through a global tender where terms like concessional land and usage of 5% of airport land for commercial purposes were available to all bidders

New Delhi: Questioning the jurisdiction of The Comptroller and Auditor General (CAG) which had detected a loss of Rs1.63 lakh crore in the leasing of land to GMR-led private operator, the Delhi International Airport Pvt Ltd (DIAL) on Monday said the concessions available to it to run the Delhi airport were part of the bid documents and were available to every bidder, reports PTI.

CAG, in its draft audit report which is yet to be tabled in Parliament, states that DIAL could earn Rs1.63 lakh crore over a period of 60 years from land that leased out for a mere Rs100 per year.

"At the outset we would like to state that DIAL, being a public-private partnership, does not come under the purview of CAG audit," DIAL said in a statement.

GMR-led DIAL said it had won the bid to development Delhi airport through a global tender where terms like concessional land and usage of 5% of airport land for commercial purposes were available to all bidders.

"The bid process and conditions were reviewed and upheld by the Supreme Court of India in 2006," it said.

Stating that the figure of Rs1.63 lakh crore as value of land was "theoretical and grossly misleading", it said the amount of revenue accruing to DIAL over 58 years does not represent the time value of money.

"It (Rs1.63 lakh crore) is simply the absolute amount of revenues that accrue to DIAL over 58 years (45.99% of the same will be shared with Airport Authority of India) and does not represent the time value of money. The net present value of this land would be only Rs4,547 crore (about Rs19 crore per acre)," the statement said.

On CAG's criticism of Civil Aviation Ministry allowing DIAL to charge airport development fees (ADF) from air passengers in violation of agreement, the operator said development fee is a form of pre-funding that is globally applied in number of airports.

"ADF is permitted under Section 22A of the AAI Act and this was known to all bidders. Hence this was not a post bid change," it said.

CAG had stated there was no mention of a development fee in the original bid and levying of such a charge violated the Operation Management Development Agreement (OMDA).

GMR-led DIAL said the levy of development fee was necessitated on account of inability of AAI to infuse further equity and lenders not willing to provide further debt.

The imposition of the development fee on passengers at Delhi airport came under attack in the Rajya Sabha last month with CPI-M, BJP, SP and BSP members questioning the levy for incoming passengers.

"For DIAL, it must be noted that, amount of DF levied directly reduces the basis used for calculating the aeronautical tariff at the airport to be charged from passengers and airlines," the statement said adding passengers and airlines would have else been paying 200% of additional tariff hike.

"As a result, DF is actually detrimental to DIAL as it meant a loss of nearly Rs 546 crore of revenue per year," it said adding DIAL has delivered world class infrastructure in fulfilment of its commitment under the concession document.

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