New Delhi: The CAG has found that the company, which runs the Delhi International Airport, 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 per annum, hurting the interest of the government.
A draft report on the public private partnership for the Indira Gandhi International Airport has also come down heavily on Delhi International Airport (DIAL), which runs the utility, on the issue of levy of user charges on passenger which was not part of the original agreement when the land was given to it.
The Comptroller and Auditor General of India found that 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 Airport Authority of India have always ruled in favour of operators and against the interest of the government.
Efforts to reach DIAL for its reactions failed to fructify.
The report, which is yet to be tabled in Parliament, refers to the leasing out 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 to DIAL.
For the additional land of 190 acres, a one-time fee of Rs 6.19 crore was levied on DIAL. The original agreement permitted DIAL to utilise 5 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 license 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.
"Audit would like to draw attention to the fact that this area is part of the entire area of land that has been handed over to DIAL at the lease rent of Rs 100 per annum," the report observed.
It said Merril Lynch has made a current valuation of land at rate of Rs 100 crore per acre. Thus even in terms of this conservative estimate, the total current value of the land available to DIAL for commercial exploitation, would amount to approximately Rs 24,000 crore.
Audit is constrained to observe that against this calculations Civil Aviation Ministry allowed DIAL to use 239.5 acres of land for commercial exploitation at a consideration of one-time payment of Rs 31 lakh and annual payment of Rs 100 only, the CAG said.
On the government permission allowing DIAL to levy a development fee on passengers at Delhi airport for funding upgradation and expansion, the audit said it was post contractual benefit provided to DIAL which was neither envisaged in the request for proposal (RFP) nor included in any provision of the agreements.
"This led to undue benefit to DIAL at the cost of passengers who were taxed for using Delhi airport through levy of Development Fee amounting to Rs 3,415 crore," the report said.
"Thus with an equity contribution of Rs 2,450 crore out of which the private consortium share was Rs 1,813 crore, DIAL has 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 it's own estimates of Rs 1,63,557 crore," the report said.
The audit also observed that original agreement did not envisage funding of the project cost through levy of development fee from passengers since the entire funding was to be through debt and equity only.
First Published: Wednesday, May 23, 2012, 18:42