Even as the Ministry of Civil Aviation and Airport Authority of India (AAI) watched silently gross violation of the master plan for the Indira Gandhi International Airport (IGIA), Delhi International Airport Limited (DIAL) not only ensured changes in major development plan but also got away with 43 per cent escalation in cost of the project and midway changes in the funding pattern for the airport project.
According to Comptroller and Auditor General (CAG) report tabled in Parliament on Friday, out of the total capital expenditure of Rs. 12,857 crore (Airports Economic Regulatory Authority (AERA) has admitted Rs. 12502.86 crore for levy of development fee), the promoter’s equity has been Rs. 2450 crore, out of which 26 per cent (i.e. Rs. 637 crore) was contributed by AAI and 74 per cent (i.e. Rs.1813 crore) was contributed by the other JV partners.
“Out of the capital expenditure of Rs. 12502 crore as accepted by AERA, only 19 per cent has been promoters’ contribution. Rs. 5266 crore (42 per cent) have come from loans and Rs. 1471crore (12 per cent) has come from security deposits. While only Rs. 50 crore has come from internal accruals, Rs. 3415.35 crore (27 per cent) have come from airport development fees charged on the passengers. The internal accruals is in sharp contrast to Mumbai airport, where the internal accrual has been Rs. 1999 core,’’ the report states.
Thus, with an equity contribution of Rs. 2450 crore, out of which the private consortium’s share was Rs. 1813 crore, DIAL has got a brownfield airport for 60 years and in addition, commercial rights of land valued at Rs. 24000 crore with a potential earning capacity, according to its own estimates, of Rs, 1,63, 557 crore, it adds.
Similarly, against the area of 470,179 square metres indicated in the major development plans, DIAL actually constructed 553,887 square metres of area at IGIA. Thus the actual built up ground floor area exceeded the major development plan by nearly 83,708 Sq metres (17.80). The financial auditor (KPMG Advisory Services Private Limited) appointed by AAI to verify the final project cost submitted by DIAL, reported (October 15, 2010) that the ground floor area for peak hour passenger at T3 was higher than most of the leading airports in Asia-Pacific region.
State-owned Engineers India Limited, the technical auditor, appointed by AAI also opined in August 2010 that due to this increase in area, all other items of the project have increased proportionately. “Neither Ministry of Civil Aviation nor AAI took any action for such gross violation of the master plan and the consequent increase in the project cost,’’ the report states.
On the project cost vis-à-vis original project cost, CAG says as per the business plan, the original project cost approved by DIAL and communicated by AAI on January 18, 2008 was Rs. 8975 crore. Actual project cost as on July 20, 2010, as claimed by DIAL, was Rs.12857 crore. However, the final project cost adopted by AERA for arriving at regulatory asset base was Rs.12502.86 crore. (This includes Rs. 701 crore incurred after March 31, 2010, which included Rs. 350 crore on ATC, Delhi Jal Board Rs. 54 crore and Provision Rs.297 crore). “The variation between the approved project cost and the final project cost was Rs. 3883 crore i.e. 43.25 per cent higher than the original cost.’’
The CAG also states that as per the original estimates the entire funding was proposed to be through equity, debt, security deposits and internal accruals. However, this was reduced to 72.68 per cent of the total fund requirements of the actual project cost.
