With an equity contribution of Rs 2,450 crore, of which the private consortium’s share was Rs 1,813 crore, Delhi International Airport Ltd got a brownfield airport for 60 years and in addition, commercial rights of land valued at Rs 24,000 crore with a potential earning capacity according to its own estimates of Rs 1,63,557 crore.
This has been brought out by the Comptroller and Auditor General in its report on ‘Implementation of public private partnership Indira Gandhi International Airport, Delhi’.
DIAL is a joint venture consortium led by the GMR Group which was mandated by the Government to modernise Delhi airport. The other members of the consortium include Frankfurt Airport, the Airports Authority of India (AAI) and Malaysian Airports.
The report adds that OMDA (Operation, Maintenance and Development Agreement) allows DIAL to use 5 per cent of the demised land for commercial exploitation. The current value of 9.50 acres according to AERA’s communication to Audit amounted to Rs 950 crore. The earning potential for 58 years from 9.50 acres, based on DIAL’s own projections, is Rs 6,457 crore.
The report states that the decision to levy development fee after the effective date has vitiated the sanctity of the bidding process, as the draft OMDA, which was part of the bid documents, does not mention funding of the project cost through levy of development fees. In case the joint venture was to have been permitted to levy Airport Development Fund to finance the project after signing the OMDA, this important condition should have been known upfront to all the bidders at the time of bidding, the report states. Currently, the ADF charged at Delhi is Rs 200 for passengers taking domestic flights and Rs 1,300 for passengers taking international flights.
The report points out that 4,608.9 acres of land was leased to DIAL on ‘as is where is basis’ on a highly concessional annual lease rent of Rs 100. “If the rates applicable to DGCA and BCAS had been made applicable, DIAL would have had to pay Rs 1,461 crore,” the report points out.
The report states that against the area of 470,179 squares meters indicated in the major development plans, DIAL actually constructed 553,887 square meters at IGI airport. The report points out that the variation in actual project cost vis-à-vis original project cost was 43.25 per cent higher than the original project cost. Audit has also noted that of the 15 mandated capital projects to be completed by April 3, 2008, 11 MCPS were delayed for periods ranging from 87 days to 236 days.
The report points out that based on the State Support Agreement, DIAL was not entitled to any incentive in support of base airport charges. “The Ministry, however, approved in February 2010 a 10 per cent increase in aeronautical charges, including landing, parking, passenger service fee, among others, as incentive to DIAL,” the report states.