CAG starts audit of DIAL, AAI books amid concerns over "irregularities"

Government auditor CAG has started auditing the books of GMR consortium-led DIAL and state-owned Airports Authority of India, amid concerns of alleged irregularities in the leasing of land for the international aerodrome here.

PTI| Last Updated: Jun 26, 2016, 11:41 AM IST
CAG starts audit of DIAL, AAI books amid concerns over "irregularities"

New Delhi: Government auditor CAG has started auditing the books of GMR consortium-led DIAL and state-owned Airports Authority of India, amid concerns of alleged irregularities in the leasing of land for the international aerodrome here.

Delhi International Airport (P) Ltd (DIAL) is a joint venture in which 64 per cent is owned by diversified group GMR. The state-owned Airports Authority of India (AAI) has 26 per cent shareholding and the remaining 10 percent is with Germany's Fraport.

"The Comptroller and Auditor General (CAG) audit of the accounts of DIAL and AAI has started. It is in progress," Civil Aviation Secretary R N Choubey told PTI.

The Civil Aviation Ministry had sought audit and all documents required for the exercise were submitted by DIAL to AAI, he added.

The CAG had conducted an audit of the Delhi Airport in 2011 as well.

Under the joint venture agreement for the Delhi airport, AAI is entitled to 46 per cent share in the revenue of DIAL.

The audit comes against the backdrop of Income Tax Department looking into alleged financial irregularities and suspected tax evasion in the DIAL-AAI deal.

In this respect, the Income Tax department, on June 22, carried out searches in half-a-dozen cities.

Prior to starting the audit, there had been differences between GMR Infrastructure and AAI over the accounts getting audited by CAG.

On February 25, the government informed the Lok Sabha that AAI had sought documents from its joint venture partners -- GMR and GVK -- for a CAG audit of the books of accounts of the Delhi and Mumbai airports.

"AAI has appointed CAG as its representative to scrutinise the books of accounts of DIAL and Mumbai International Airport Limited (MIAL) to ensure that due government share is accruing to AAI," Minister of State for Civil Aviation Mahesh Sharma had said in a written reply. 

The GMR-led consortium was awarded the Delhi airport project in January 2006 and it inked the Operations, Management and Development Agreement (OMDA) with AAI in April that year.

The concession period is for 30 years which can be extended by another 30 years.

About the IT Department searches, sources had said it was done after receiving "actionable intelligence" about some alleged financial irregularities in the leasing of land between DIAL and

AAI in the past, allegedly causing a loss of revenue to the government and subsequent evasion of taxes.

"As a routine survey of DIAL JVs, Income Tax officials today visited our office and we extended full cooperation to them. DIAL follows the highest level of ethical and legal standards in its businesses," the company had said in a statement.

Significantly, the Public Accounts Committee, in a 2014 report, had virtually charged then UPA government with enabling a private party (GMR) benefit from its partnership with the AAI to develop and manage the Delhi airport.

It had asked the government to furnish details of the total earnings of DIAL and that of the AAI to show "whether public interest was substantially subserved" by the agreement with GMR-led DIAL.

The CAG's 2011 report on the Delhi airport had detected a loss of Rs 1.63 lakh crore to the government because land was leased to DIAL allegedly at a "throwaway" prices. This claim was, however, contested by DIAL.