The Comptroller and
Auditor-General has found that the GMR-owned Delhi International Airport
Limited (DIAL), which runs the Indira Gandhi International Airport here, has a
potential to earn Rs.1,63,557 crore over a 60-year period from the land given
to it on a lease rent of Rs.100 a year, hurting the interests of the
government.
A draft report of the
audit says the contents of a Cabinet note approved in 2003 were “omitted” by
the government in April 2006 when the Operation Management Development
Agreement (OMDA) for Delhi's T3 terminal was signed to suit the interests of
DIAL.
Moreover, the State
Support Agreement (SSA) allows the company the Right of First Refusal with
regard to a second airport planned within a 150-km radius of the airport. The
second airport will be decided through a competitive bidding process, in which
DIAL can participate. In the event of DIAL being unsuccessful, it will be
allowed to match its bid with the most competitive bid, if it is within 10 per
cent of the most competitive bid. This condition will be applicable for the
first 30 years. The SAA does not elaborate on the competitive bidding process
or the model that will be followed. This provision thwarts competition and
provides DIAL with natural advantage on the second airport, says the report.
Government interest
the casualty
The report is also
critical of levying user charges on passengers, which was not part of the
original agreement when the land was given to the company. “Whenever DIAL had
raised an issue regarding revenue to accrue to it or expenditure to be debited
to the government in contravention of the agreement, the Civil Aviation
Ministry and AAI have always ruled in favour of operators and against the
interest of the government.”
The report refers to
the leasing of 4,608 acres for development of the airport, with an additional
190 acres leased to DIAL. The land and the premises were leased out at Rs.100
annually. For the additional 190 acres, a one-time fee of Rs.6.19 crore was
levied on DIAL.
The original agreement
permitted DIAL to utilise five per cent of the total area of 4,799 acres for
commercial exploitation, which would work out to 240 acres. The projected
earning capacity of this land in terms of licence fee over the concession
period of 58 years was indicated by DIAL itself as Rs.681.63 crore per year per
acre. “Thus, for the entire area of 239.95 acres, the potential earning from
the land, according to the calculations worked out by DIAL itself, amounts to
Rs.1,63,557 crore,” the report states. It said Merrill Lynch made a current
valuation of land at Rs.100 crore an acre.
Thus, even in terms of
this conservative estimate, the current value of the land available to DIAL for
commercial exploitation will amount to approximately Rs. 24,000 crore. Against
these calculations, the Ministry allowed DIAL to use 239.5 acres for commercial
exploitation for a one-time payment of Rs.31 lakh and an annual payment of a
mere Rs.100, the report notes.
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