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‘GMR-led DIAL gains Rs 3,415 crore through levy of development fee’

Published: 18th August 2012 10:12 AM  |   Last Updated: 18th August 2012 12:48 PM   |  A+A-

The CAG report on Friday grounded DIAL’s alleged flight of loot by exposing ways in which private developer fleeced passengers under the garb of development fee. The auditor did not spare government either, which it alleged violated its own policy for the benefit of DIAL.

Auditor says the approval of ministry for levy of development fee led to undue benefit to DIAL to the tune of Rs 3,415 crore. Delhi International Airport Ltd (DIAL) is a joint venture consortium led by the GMR Group. The other members of the consortium include Airports Authority of India, Malaysian Airports and Frankfurt airport.

The government in 2006 handed over the IGI airport to DIAL and granted exclusive right to develop, design and manage the Indira Gandhi International Airport. Ministry of Civil Aviation in Feb 2009 allowed DIAL to levy a development fee between Rs 200 and Rs 1,200 on passengers to finance the cost of up-gradation.

CAG said contrary to the provision of agreement the Ministry approval for collection of airport development fee amounted to extension of undue advantage to DIAL. 

In a formal response to the CAG report, DIAL refuted the charges stating that airport development fee (ADF) was an afterthought and done only to benefit DIAL is absolutely untrue.

On the most controversial issue of leasing government land at a highly concessional rate, the auditor said 239 acre of land for commercial purpose was given to the DIAL for Rs 100 per acre per annum for 58 years.

The report said potential earning from the land, according to the calculations worked out by DIAL itself, amounts to Rs 1,63, 557 crore. However, DIAL denied the CAG calculation calling it just an arithmetic exercise.

CAG further said even in terms of a conservative estimate, the total current value of the land available to DIAL for commercial exploitation would amount to approximately Rs 24,000 crore.

 “Other substantial values have also accrued to DIAL,” CAG stated and  asked the government to investigate all cases of such post-bid actions and fix responsibility. It recommended that in case of revenue sharing arrangement, adequate care should be taken to clearly list out the items to be included as shareable revenue.

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