Ministry of Civil Aviation refutes CAG's observations on Delhi airport

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Ministry of Civil Aviation on Friday refuted the report on Delhi's Indira Gandhi International Airport, presented by the Comptroller and Auditor General (CAG) in the parliament, claiming it 'totally erroneous and misleading'.

The ministry, in a statement, said the CAG report simply adds the nominal value of the projected revenue without taking the net present value, and it (the Ministry) 'strongly refutes the loss figures and other allegations as made in the report'.

"The calculation of presumptive gain from the commercial use of land at the Delhi Airport is totally erroneous and misleading as it simply adds the nominal value of the projected revenue, without taking the net present value.''

''In fact the net present value of the figure quoted by CAG is Rs. 13,795 crores only. CAG has further failed to appreciate that 46% of this amount would be payable to AAI as revenue share," the statement said.

Defending the levy of Development Fee by DIAL and noting that the charging of the fee has been upheld by the Supreme Court, the ministry pointed out that the levy of Development Fee is under Section 22 (A) of AAI Act, 1994 and was in the knowledge of all the bidders prior to the bidding process.

"It is also pointed out that the levy of Development Fee is under Section 22 (A) of AAI Act, 1994 and was in the knowledge of all the bidders prior to the bidding process.''

Hence, contrary to what the CAG has said, the levy of Development Fee by DIAL was not a post contractual benefit provided to DIAL at the cost of passengers.''

Further, the levy of the Development Fee has been upheld by the Supreme Court, which has already examined and rejected all the issues now being raised by CAG in its report," the statement elucidated.

On the issue of lease of Airport land, the Ministry said that the land has not been given to DIAL on rental basis and the Airports Authority of India (AAI) now receives 45.99% share of Gross Revenues of DIAL and 26% of all dividends.

"It is clarified that the land has not been given to DIAL on rental basis. Rs100 is just a token amount for the purpose of the Conveyance Deed. The determining factor for grant of concession to the bidder was the Gross Revenue share quoted by the bidders. As a result, Airports Authority of India (AAI) now receives 45.99% share of Gross Revenues of DIAL and 26% of all dividends," the statement said.

It added that the profit to the AAI during the entire Concession period is expected to be over Rs. 3 lakh crore, and it is likely to get Rs. 1770 crores in the year 2012-13 and Rs. 2287 crores in the year 2013-14.

"The AAI share of revenue from DIAL is further going to constantly rise every year in the balance concession period," it said.

The statement further noted that the right to use 5 per cent of Airport land for commercial purpose was also defined in the bid and known to all bidders.

"All decisions including the entire bidding process and the approval of the Operation Management and Development Agreement (OMDA) was monitored by EGoM and subsequently approved by the Union Cabinet. The bidding process has also been upheld by the Supreme Court," the Ministry said.

Accusing the CAG of not incorporating in its report, the views of Ministry of Civil Aviation and AAI, the statement said, "There are aspects mentioned in the final report which were neither included in the draft audit report nor were discussed with the Ministry of Civil Aviation at any point in time."