The civil aviation ministry has once again sought the attorney general?s (AG?s) opinion on the revenue implications for the government-owned Airports Authority of India (AAI) due to private airport firm Delhi International Airport (DIAL) forming joint ventures for non-core activities like retail and cargo.
In 2007-08, the then AG had upheld DIAL?s move, saying it was in compliance with the operation, management and development agreement (OMDA) between the AAI and DIAL. ?We have written to the AG on the issue. We have examined it and found that DIAL has adopted the best possible option to maximise the revenue,? a senior aviation ministry official told FE.
The official added that the DIAL revenue shared with AAI had significantly increased over the last three-four years.
DIAL shared R577.27 crore with the public sector airport operator in 2010-11 compared with R272 crore in 2006-07. During the same period, non-aeronautical revenues such as those from retail, cargo, IT and duty-free increased to R796 crore from R323 crore. Comptroller and Auditor General (CAG) principal director (commercial audit) Ila Singh, in a four-page communication recently, has asked the civil aviation ministry to examine the revenue implications for AAI due to the JVs in cargo and retail segments.
DIAL has formed 11 joint venture companies in non-aeronautical areas and holds part equity in the companies. According to the OMDA, DIAL has to share 46% of its revenue with the AAI annually. DIAL is a joint venture consortium of GMR Group (54%), AAI (26%) and Malaysia Airports Holdings Berhad (10%).
Airports Economic Regulatory Authority of India (AERA) chairman Yashwant Bhave had in November last year wrote to the then civil aviation secretary that formation of JVs in different areas like food and beverages (F&B) and cargo had serious regulatory implications.
DIAL has maintained that there has been no intent whatsoever to divert revenues and reduce AAI?s revenue share in any way.
?The practice followed by DIAL is similar to the model adopted prior to the privatisation of Delhi airport and also during the award of non-aero concessions in Terminal 2, which is based on the highest revenue share through straight concession,? DIAL told FE.