Delhi airport land deal under CBI scanner for alleged irregularities

New Delhi: Did the UPA government give away some land to the GMR-lead consortia at lower than market rates for Delhi International Airport? According to sources, the Central Bureau of Investigation (CBI) has begun a preliminary inquiry into alleged irregularities in the leasing of land for Delhi International Airport. These sources say the agency wants to probe the consortia lead by GMR which runs the airport, the Airports Authority of India and the Ministry of Civil Aviation.

One of the issues under investigation seems to be the 190 acre land parcel that was given to the GMR-led consortia over and above the land already allotted for airport purposes. AAI leased out the airport land to the GMR-lead consortia as part of a PPP initiative to modernise and operate a world class airport in 2007. The consortia picked up 74 percent stake in joint venture company formed for the airport project, while 26 percent equity was retained by AAI.

“CBI has registered a PE against unknown officials of Ministry of Civil Aviation, AAI and Delhi International Airport Ltd (DIAL). Allegations are that certain officials have committed gross misconduct in the matter of lease of 190 acres of government land belonging to AAI at the Indira Gandhi International Airport to M/s DIAL at nominal price as compared to the prevailing market price,” sources in the CBI told Firstpost.

It is interesting to note that a report by the Comptroller & Auditor General way back in 2012-13 had also raised questions on the price at which this 190 acres was leased out to the consortia. Is the CAG report the basis for the CBI’s preliminary inquiry now?

Two things become clear from para 2.4 of this CAG report:

1. The Airports Authority of India which owns the land and has leased it out to the GMR-lead consortia for 30 years, had fixed Rs 150 crore as one-time fee for “carved out assets” which simply means land which remained with AAI after leasing out to DIAL. This amount was fixed as one-time fee without taking into account either the extent of land or assets of the airport.

2. The question which CAG asked in its report was why this figure was used to calculate lease rental which the GMR-led consortia should pay for this 190 acres of additional land instead of the market price, which was of course higher.

When contacted, a DIAL spokesperson “we are not aware of any PE initiated by the CBI”, while declining to make any further comments.

According to sources, the 190 acres in question was land which was given by AAI on lease to the GMR-led consortia after it became clear that a Shiva idol and some other impediments will hamper the alignment of one of the runways at the airport. To maintain the runway alignment, this land parcel was leased out by AAI but with a strict caveat: DIAL could not use this land for commercial purposes.

To put things in perspective, the concession agreement for the Delhi airport envisaged that only 5 percent of the total land parcel or somewhere near 230 acres of the total 4,750 acres of airport land could be used for commercial purposes. In lieu of this, the AAI was given 46 percent share in the revenues of the airport despite having a mere 26 percent equity ownership.

Sources say the 190 acres under contention (which is over and above the 4,750 acre) was never used for commercial purposes and therefore there was possibly no irregularity in the price at which this land parcel was leased to the GMR-lead consortia.

These sources said that in fact, this 190 acre land parcel was used to house navigational aides.

Earlier this week, we had noted that already, the CAG has said it wants a special audit of the Delhi airport operator. It has alleged that DIAL has diverted revenues arising from nine joint ventures with third parties where DIAL is a minority stakeholder. These JVs look at non-aeronautical functions like parking, food and beverages and cargo handling. The CAG’s argument here is that the government does not audit these JVs and what they share as revenue with DIAL. And since the AAI has a right to a 46 percent share of DIAL’s revenues, it may be losing out on quite a bit of income.

There is no way of knowing whether CAG’s queries on JVs of DIAL and its questioning of the price at which the 190 acres land parcel was given to the GMR-lead consortia are linked to the CBI’s preliminary inquiry now.