CAG smells Rs. 1.63-lakh cr scam in Delhi airport deal

[CaPtAiN_pLaNeT]

CAG smells Rs. 1.63-lakh cr scam in Delhi airport deal
Aurangzeb Naqshbandi & Tushar Srivastava, Hindustan Times
New Delhi, May 23, 2012

CAG smells Rs 1.63-lakh cr scam in Delhi airport deal - Hindustan Times

First Published: 01:02 IST(23/5/2012)


The Comptroller and Auditor General of India (CAG) hinted in its report on the Delhi airport modernisation project that the government had given out prime land that will fetch Rs. 1.63 lakh crore to its private sector partner, Dial. The CAG report — accessed by HT but not yet tabled in
related stories

Parliament — said the company had got 4,799.09 acres of land on a Rs. 100 annual lease rent for 60 years for an equity contribution of only Rs. 1,813 crore.

A Dial spokesperson, however, said, “We are not privy to the findings of the report and, therefore, not in a position to respond to it at present.”

What’s more, the operations, management and development deal signed by the Airports Authority of India permitted the company to utilise 5% of the land for commercial exploitation. Consultancy firm Merrill Lynch had worked out the valuation of the land at Rs. 100 crore an acre.

“Thus, the total current value of the land available to Dial… would amount to Rs. 24,000 crore.”

The CAG said, “The projected earning capacity of this land (239.95 acres) in terms of licence fee over the concession period of 58 years was indicated by Dial itself as Rs. 681.63 crore per acre in a letter to the joint secretary, aviation ministry.” http://www.hindustantimes.com/Images/Popup/2012/5/23_05_12-metro1.jpg

The auditor also pointed out that the government decision to offer a “post-contractual benefit” to the private partner, Delhi International Airport Ltd (Dial), of levying development fees forced passengers to cough up Rs. 3,415.35 crore towards the project cost.

The auditor said the original deal did not mention that part of the project cost would be raised through development fees. It said that if the joint venture was to have the permission to levy the fee, it should have been made known to all the other bidders too.

Delhi airport charges Rs. 1,300 and Rs. 200 per passenger for international and domestic travel, respectively. Besides, from May 15, Dial started charging a user development fee of Rs. 436-1,068 from international and Rs. 195-462 from domestic passengers.

The ministry of civil aviation, however, informed the auditor that “the decision to restructure and modernise Delhi airport was a policy decision of the cabinet. The terms and conditions as well as the modalities were finalised and approved by the empowered group of ministers.”

Indians have been screwed by building a 3.5 billion USD terminal but with a corruption scum of 1.63 lakh cr (Appox. 30 billion USD) .

 

[CaPtAiN_pLaNeT]

Just wondering what is the view of the Indian on this???

 

[illusion8]

Indians have been screwed by building a 3.5 billion USD terminal but with a corruption scum of 1.63 lakh cr (Appox. 30 billion USD)

.

LOL @ the level of dumbness, It's not India screwed, it's the promoters of DIAL who are screwed now, they have to give justifications and cough up more dough, Indian courts can easily stop them from collecting any revenue from passengers. They either agree to a fairer deal or get embroiled in a legal mess. Such exposures are a God send. BTW didn't BD sell some port for a paltry sum to a Singaporean country - did anybody work out the economics of that deal?

 

[CaPtAiN_pLaNeT]

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LOL @ the level of dumbness, It's not India screwed, it's the promoters of DIAL who are screwed now, they have to give justifications and cough up more dough, Indian courts can easily stop them from collecting any revenue from passengers. They either agree to a fairer deal or get embroiled in a legal mess. Such exposures are a God send. BTW didn't BD sell some port for a paltry sum to a Singaporean country - did anybody work out the economics of that deal?

Not yet but a Singaporean company proposed for the deal. Final total investment in 30 year will cross 3 billion usd though initially it is less. It is under consideration.

As they have already invested hardly court can do anything as it is a group of cabinet minister that handed the deal to the company after going through all the clause. If collecting money from the passenger was on the card then court wont be able to do anything.

 

[illusion8]

Not yet but a Singaporean company proposed for the deal. Final total investment in 30 year will cross 3 billion usd though initially it is less. It is under consideration.

As they have already invested hardly court can do anything as it is a group of cabinet minister that handed the deal to the company after going through all the clause. If collecting money from the passenger was on the card then court wont be able to do anything.

Who told you that?? any deal can be investigated even if its complete, the investors carry the complete risk now, they have to justify the allegations. It's a 60 year earning estimate. If the given projections are not correct than it will be reworked and if the parties don't agree than the court can pass sentence to stop collection of revenue from passengers till they come clean.

As an individual I can do that, I can file a PIL saying that there's something fishy and needs to be investigated. From henceforth all of their transactions will come under scrutiny.

 

[JayAtl]

How is having a body that catches scams a bad thing or loss for a country in the long run? Don't you wonder how infrequent or almost nil cases are reported among India's neighbors? It seems like they have no corruption to report, you think that is not worrisome?

If you are any kind of patriot , your reaction would be- We need an audit body , independent like India's in our country to catch our corrupt politicians vs. a haha look you had a scam busted.

 

[phylumchordata]

Indians have been screwed by building a 3.5 billion USD terminal but with a corruption scum of 1.63 lakh cr (Appox. 30 billion USD) .

This is good news..if proven true ADF will be slashed and more money will be given by DIAL to GoI... plus the reason behind is that it was conceived that Delhi would handle approx. 30 mil by now but it handled 36 mil last year which means they are earning 20% more than they anticipated...Delhi airport is going to make it to top 20 this year...which is great.

 

[Ignited Mind]

Just wondering what is the view of the Indian on this???

What do normal humans in BD do upon hearing of such a loot of their country?

 

[LaBong]

The logic of CAG report is like that -

Sachin scored 150 of 100 balls. Sachin could have scored 600 of 100 balls. Thus proved country has lost 450 because of Sachin.

 

[Ignited Mind]

The logic of CAG report is like that -

Sachin scored 150 of 100 balls. Sachin could have scored 600 of 100 balls. Thus proved country has lost 450 because of Sachin.

What is the likelihood of GoI babus and ministers making crores when Sachin makes either a 0 or a 600?

...and What is the likelihood of GoI babus and ministers making crores when a national asset which could have been sold for Rs. 100 is sold for Rs. 1?

Next step is to calculate the amount of the heist which can be easily calculated in any market economy.

So your analogy is terribly misplaced.

 

[LaBong]

What is the likelihood of GoI babus and ministers making crores when Sachin makes either a 0 or a 600?

...and What is the likelihood of GoI babus and ministers making crores when a national asset which could have been sold for Rs. 100 is sold for Rs. 1?

Next step is to calculate the amount of the heist which can be easily calculated in any market economy.

So your analogy is terribly misplaced.

I'm just showing how the 1.63 lakh crores amount has been calculated, it's fine to expose babus, but let's be rational.

 

[Ignited Mind]

I'm just showing how the 1.63 lakh crores amount has been calculated, it's fine to expose babus, but let's be rational.

I think the CAG knows it's business well and must have taken into account all the factors before it reached that figure.

Primary loss can be easily calculated from (Market Value - Contract Value).

Not very hard to estimate Market Value in a highly liquid market such as real estate in Delhi.You only need to glance over at land rates/lease rates in the same area. Should give you a pretty much fair estimate.

 

[Hulk]

CAG smells Rs. 1.63-lakh cr scam in Delhi airport deal
Aurangzeb Naqshbandi & Tushar Srivastava, Hindustan Times
New Delhi, May 23, 2012

CAG smells Rs 1.63-lakh cr scam in Delhi airport deal - Hindustan Times

First Published: 01:02 IST(23/5/2012)


The Comptroller and Auditor General of India (CAG) hinted in its report on the Delhi airport modernisation project that the government had given out prime land that will fetch Rs. 1.63 lakh crore to its private sector partner, Dial. The CAG report — accessed by HT but not yet tabled in
related stories

Parliament — said the company had got 4,799.09 acres of land on a Rs. 100 annual lease rent for 60 years for an equity contribution of only Rs. 1,813 crore.

A Dial spokesperson, however, said, “We are not privy to the findings of the report and, therefore, not in a position to respond to it at present.”

What’s more, the operations, management and development deal signed by the Airports Authority of India permitted the company to utilise 5% of the land for commercial exploitation. Consultancy firm Merrill Lynch had worked out the valuation of the land at Rs. 100 crore an acre.

“Thus, the total current value of the land available to Dial… would amount to Rs. 24,000 crore.”

The CAG said, “The projected earning capacity of this land (239.95 acres) in terms of licence fee over the concession period of 58 years was indicated by Dial itself as Rs. 681.63 crore per acre in a letter to the joint secretary, aviation ministry.” http://www.hindustantimes.com/Images/Popup/2012/5/23_05_12-metro1.jpg

The auditor also pointed out that the government decision to offer a “post-contractual benefit” to the private partner, Delhi International Airport Ltd (Dial), of levying development fees forced passengers to cough up Rs. 3,415.35 crore towards the project cost.

The auditor said the original deal did not mention that part of the project cost would be raised through development fees. It said that if the joint venture was to have the permission to levy the fee, it should have been made known to all the other bidders too.

Delhi airport charges Rs. 1,300 and Rs. 200 per passenger for international and domestic travel, respectively. Besides, from May 15, Dial started charging a user development fee of Rs. 436-1,068 from international and Rs. 195-462 from domestic passengers.

The ministry of civil aviation, however, informed the auditor that “the decision to restructure and modernise Delhi airport was a policy decision of the cabinet. The terms and conditions as well as the modalities were finalised and approved by the empowered group of ministers.”

Indians have been screwed by building a 3.5 billion USD terminal but with a corruption scum of 1.63 lakh cr (Appox. 30 billion USD) .

Do you know that Robert Vadra became billionaire by doing nothing, kahain se to paisa aayega na.

 

[Ignited Mind]

Scams, scams, and more scams.

 

[Hulk]

The logic of CAG report is like that -

Sachin scored 150 of 100 balls. Sachin could have scored 600 of 100 balls. Thus proved country has lost 450 because of Sachin.

That does not make any sense, you are trying to belittle CAG, they are trained auditors. There might be some difference in the numbers. Delhi airport was given on lease on meger 100 Rs a year.