Feature
Delhi Airport Scam : ‘PPP’ - Private Plunders the Public

Yet another instance of crony capitalism can be seen in the CAG revelations (to be tabled in Parliament in the monsoon session) of the major corruption involved in the PPP model of construction of Delhi’s new Airport.

Delhi International Airport Limited (DIAL), a public-private consortium led by GMR Infrastructure Limited, built the Airport. According to the CAG report, DIAL overshot its budget by over $2 billion (Rs 8,955 crore) and one-fourth of the amount will have to be borne by air passengers in the form of higher airport taxes. According to the CAG, the Government lost Rs 1,185 crore in this thanks to undervaluation of 48.5 acres of land around the airport. DIAL gave the licence to develop this land to a newly formed subsidiary, Delhi Aerotropolis Private Limited on a valuation of Rs 775 crore for the land; but the valuation according to land rates in Gurgaon amounts to not be less than Rs 1,960 crore.

The state-owned Airports Authority of India (AAI) had a 46% revenue share partnership agreement with DIAL, which was to get the remaining 54 per cent. But by going for joint ventures with subsidiaries, DIAL artificially brought its own share of revenue down to 15 per cent, resulting in lowering of AAI’s share.

In a letter to the civil aviation secretary last year, the chairman of the Airports Economic Regulatory Authority of India (AERA), said, “It has been alleged that various revenue streams are being sub-contracted to joint ventures specially created by DIAL on revenue-sharing basis...This reduces the revenue share of AAI.”

These joint ventures were often contracted with subsidiaries owned by people close to Praful Patel – NCP leader and then civil aviation minister in the UPA Government, as well as other senior NCP leaders. For instance, the CAG alleges that Deepak Talwar, a lobbyist who was awarded two major contracts with DIAL, was known to be close to Patel.

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