simply the absolute amount of revenue that would accrue to DIAL over 58 years ( with 45.99 per cent of the same to be shared with AAI), and does not represent the time- value of money,” it said.
CAG also said the Government decision to offer “post- contractual benefit” to DIAL of levying development fee forced passengers to cough up Rs 3,415.35 crore towards the project cost. The ministry said that AERA, an independent regulator responsible for determining tariff at major airports in the country, had approved the levy of development fee at Delhi, as well as Mumbai airport, after taking the Supreme Court judgment into account.
CAG had also said that DIAL was given unfair advantage by grant of unilateral right to extend concession by 30 years without renegotiating the deal. The ministry explained that the objective of long concession period was to attract investments in a capital intensive sector when government could not invest, to provide impetus to privatisation efforts and enhance Government revenue over a longer period. The ministry said the concession period of 30 ( plus 30 years, the extension being prerogative of the joint venture agreement) was mentioned in the Operations, Management and Development Agreement, and released to all bidders during the bidding process in 2005. It was not only for DIAL, and the same conditions were offered to bidders for Mumbai airport.
All the terms and conditions in the bid document were reviewed by the Empowered Group of Ministers and approved by the Cabinet. This included allowing the use of 5 per cent of airport land for commercial purposes. “There has been no change in any condition/ criteria/ clauses after the bid completion and award of contract,” claimed the ministry. Zaidi said that the audit officers should hold further discussions with the Ministry of Civil Aviation officials before finalising the CAG report and tabling it in Parliament.