GMR got cheap land for IGIA construction: Auditor

The Comptroller and Auditor General (CAG) of India has found the land for the newly constructed Indira Gandhi International Airport (IGIA) was awarded to the GMR-led company at a throwaway price, resulting in a loss of Rs 1.65 lakh crore to the exchequer.

The Civil Aviation Ministry’s decision to award the contract to GMR-led DIAL (Delhi International Airport Ltd) on a lease of Rs 100 per annum has hurt government’s interest. It has caused great loss to the tax payers and users, the CAG report on the Delhi Airport presented in Parliament on Friday said.

The report said 239 acres of land for the construction of  the terminal was given out to GMR-led DIAL on lease against the market rate of Rs 24,000 crore. It added that the commercial rights of the land was valued at Rs 24,000 crore and its potential earning capacity Rs 1,63,557 crore in the next 60 years.

The CAG report further said that the land was given to the company at rates lower than even to government organisations like the Director General of Civil Aviation and the Bureau of Aviation Security.

The auditor has also criticised the levy of development fee on passengers using the Delhi Airport. It said DIAL benefited to the tune of Rs 3,400 crore by levying development fee from the passengers. However, this fee was in violation of the bidding process.

Currently, the development fee is charged on both outgoing and incoming domestic and international passengers at the Delhi airport. The fee ranges from Rs 220 to Rs 520 for domestic passengers and Rs 490 to Rs 1,200 for international passengers.

The CAG asked the government to investigate all cases of post bid concessions and fix responsibility. It recommended that all public private arrangements must be linked to certain basis triggers like traffic volume, tariff, return on investment, break-even point. “A long concession period without any trigger may lead to undue financial benefit to the concessionaire,” it said.

The Civil Aviation Ministry refuted the charges of presumptive gain from the commercial use of land at the Delhi Airport as “totally erroneous and misleading” and said the report simply added the nominal value of the projected revenue, without taking the net present value.

The ministry also pointed out that the levy of development fee was in the knowledge of all the bidders prior to the bidding process. It said the levy was not a post contractual benefit provided to DIAL at the cost of passengers and that it was upheld by the Supreme Court, which has already examined and rejected all the issues now being raised by CAG in its report.