CAG smells Rs 1.63-lakh cr scam in Delhi airport deal | delhi | Hindustan Times
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CAG smells Rs 1.63-lakh cr scam in Delhi airport deal

delhi Updated: May 23, 2012 09:32 IST
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The Comptroller and Auditor General of India (CAG) hinted in its report on the Delhi airport modernisation project that the government had given out prime land that will fetch Rs 1.63 lakh crore to its private sector partner, Dial.

The CAG report — accessed by HT but not yet tabled in Parliament — said the company had got 4,799.09 acres of land on a Rs 100 annual lease rent for 60 years for an equity contribution of only Rs 1,813 crore.

A Dial spokesperson, however, said, “We are not privy to the findings of the report and, therefore, not in a position to respond to it at present.”

What’s more, the operations, management and development deal signed by the Airports Authority of India permitted the company to utilise 5% of the land for commercial exploitation. Consultancy firm Merrill Lynch had worked out the valuation of the land at Rs 100 crore an acre.

“Thus, the total current value of the land available to Dial… would amount to Rs 24,000 crore.”

The CAG said, "The projected earning capacity of this land (239.95 acres) in terms of licence fee over the concession period of 58 years was indicated by Dial itself as Rs 681.63 crore per acre in a letter to the joint secretary, aviation ministry." http://www.hindustantimes.com/Images/Popup/2012/5/23_05_12-metro1.jpg

The auditor also pointed out that the government decision to offer a “post-contractual benefit” to the private partner, Delhi International Airport Ltd (Dial), of levying development fees forced passengers to cough up Rs 3,415.35 crore towards the project cost.

The auditor said the original deal did not mention that part of the project cost would be raised through development fees. It said that if the joint venture was to have the permission to levy the fee, it should have been made known to all the other bidders too.

Delhi airport charges Rs 1,300 and Rs 200 per passenger for international and domestic travel, respectively. Besides, from May 15, Dial started charging a user development fee of Rs 436-1,068 from international and Rs 195-462 from domestic passengers.

The ministry of civil aviation, however, informed the auditor that “the decision to restructure and modernise Delhi airport was a policy decision of the cabinet. The terms and conditions as well as the modalities were finalised and approved by the empowered group of ministers.”