With the CAG report on Delhi airport creating a controversy, Director-General of CAG Gautam Guha spoke to Business Line on the report.
Excerpts from the interview:
The Ministry is believed to have sent a detailed analysis of the report pointing out that all decisions were taken by e-GoM and Cabinet…
We have not gone into policy. We have not challenged whether private public partnership is okay. We have gone into the operationalisation of it.
All these draft agreements have been approved by e-GoM but that does not mean there is no problem with the transaction document.
Two types of concessions have been given. One is in the transaction document itself. Like that of first right of refusal.
One set of transaction informatives is about the transaction documents being approved.
There have been various favours (given) to them, for example, whether the bidders knew that Development Fee will be allowed.
But that has been upheld by the Supreme Court…
The question before the Court was that the Ministry of Civil Aviation issued an order on February 9, 2009 allowing Delhi International Airport Limited (DIAL) to levy a development fee. The question before the apex court was, is the Ministry of Civil Aviation competent to allow DIAL to levy DF. The Court said no.
We have not gone into that.
We have said the Operations Maintenance and Development Agreement (OMDA) says that the debt and equity should be provided by the joint venture. And when you have allowed DIAL and for that matter AAI to impose development fee you have violated OMDA.
The apex court never considered OMDA.
We have never said that the process (bidding) was done wrongly. What we have said is that you have certain problems in OMDA draft agreement. When a private public partnership takes place, we are saying that the Government gives the asset land, building, etc., and the private partner brings in capital. In this particular case, the private partner has brought in capital of Rs 1,813 crore or about 19 per cent.
Of which Rs 637 crore belongs to Airports Authority of India.
The total equity is Rs 2,450 crore. Let us do a cost-benefit analysis. You have brought in Rs 1,813 crore (and) you have got 240 acres.
There is no provision for monetisation. At no point of time has anyone considered what the value of this land is. You can give the land. But you should know its value.
When project expenditure shoots up, this also includes 85,000 square meters of extra space built area.
They did not want to bring in more equity or debt. What they do is charge the passenger.
Please remember that there is no return on this money. This is the point that we are trying to bring out. We have never said about transparency.
The OMDA condition says that you will have to bring in debt and equity. They did not bring full debt and equity. In fact their equity is only Rs 1,830 crore.
The only way they can bring in more equity is if AAI dilutes its stake…
Wrong. There is a Share Holders Agreement. Clause 3.3.3.1 says that it is the right of AAI first to be offered. But it can refuse.
Clause 3.3.3.3. says that if AAI refuses, the private consortium will have to pick it up.
Then Clause 6 says that even if AAI shareholding comes down to 10 per cent. AAI will enjoy all the special powers as if it has shareholding of 26 per cent. Therefore, AAI equity contribution being Rs 637 crore the total equity allowed is Rs 6,370 crore. If you take away AAI equity contribution of Rs 637 crore then up to Rs 5,733 crore could have been infused by the private consortium without diluting AAI position in any way.
The whole land has been given at Rs 100. The Ministry of Civil Aviation has written to us saying that they had to save huge stamp duty. But the point is that you do not decide if the land (is) transferred on market rate or not merely on the basis of how much stamp duty you have to pay. There is a certain intrinsic value of the land.
We are not saying (it is) a favour to GMR (but) to DIAL, the joint venture.
What will be the recommendation to Government? Will you ask them to relook OMDA?
No. We are not suggesting that. We do not think that OMDA can be removed. But this is for the future because a lot of other airports are coming up.