CAG red-flags govt policy on Delhi airport

In its exit conversation with the central auditor,the ministry claims to have clarified all doubts.

While a draft Comptroller and Auditor General (CAG) report has sought to red flag policy decisions linked with privatisation of the Delhi airport,the Civil Aviation Ministry today maintained that it has answered all queries and still awaits the contents of the final report.

In its exit conversation with the central auditor,the ministry claims to have clarified all doubts.

For instance,the issue of airport development fee was explained as a logical continuance of the Airports Authority Act amendment of 2003 later incorporated in Airport Economic Regulatory Authority Act of 2008.

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The draft report observes that Operation,Maintenance and Development Agreement (OMDA),which was cleared by an Empowered Group Of Ministers (EGoM),was weighed in favour of the private operator. It allowed the operator to extend by another thirty years the concessionaire without any re-negotiations of the agreement terms.

Whenever DIAL has raised an issue regarding revenue to accrue to it or expenditure to be debited to government,in contravention of the provisions of OMDA,the ministry and AAI have always ruled in favour of the operators and against the interest of the government, CAG said in its report on the implementation of Public Private Partnership in case the Delhi airport.

OMDA,along with the State Support Agreement,which were cleared by an EGoM,govern the modernisation of the prestigious Rs 12,000 crore airport PPP project,awarded to the GMR-led consortium in 2006.

The draft report questions the rationale behind allotting commercial land. In its executive summary,the report mentioned that the flawed implementation of the PPP agreements signed between the GMR-led Delhi International Airport Limited (DIAL) and the government resulted in the latter giving away Rs 24,000 crore-worth commercially exploitable land to the former at a consideration of one time payment of Rs 31 lakh and Rs 100 annually.

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Nearly 240 acres of the commercially exploitable land of the total 4,799.09 acres leased to DIAL has potential to earn Rs 1.63 lakh crore as per DIALs own admission,the report has pointed out. The report does not provide the ministry and AAIs response on the matter.

The report said that DIAL was given undue benefit on account of enhanced lease period,which could be extended by 30 years by the private operator without any re-negotiations on terms; and first right of refusal in case of developing second airport within 150 km.