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  1. Flawed Delhi, Mumbai airport pacts caused Rs43 crore loss to AAI

Flawed Delhi, Mumbai airport pacts caused Rs43 crore loss to AAI

State-owned AAI incurred a financial loss of Rs 43 crore due to flawed agreements with the joint venture companies operating airports in the national capital and Mumbai, according to CAG.

By: | New Delhi | Published: August 5, 2016 4:55 PM
Airports Authority of India (AAI), which is a partner in the joint ventures operating Delhi and Mumbai international airports gets a share of revenue from them. Airports Authority of India (AAI), which is a partner in the joint ventures operating Delhi and Mumbai international airports gets a share of revenue from them.

State-owned AAI incurred a financial loss of Rs 43 crore due to flawed agreements with the joint venture companies operating airports in the national capital and Mumbai, according to CAG.

Airports Authority of India (AAI), which is a partner in the joint ventures operating Delhi and Mumbai international airports gets a share of revenue from them.

The Comptroller and Auditor General (CAG) today said AAI did not take the required action to protect its “financial
interests in terms of the provision of the OMDA” signed with the two joint venture entities.

This has caused non-realisation of share of Rs 29.62 crore by AAI apart from loss of interest to the tune of Rs 13.86 crore till March 2015, the apex auditor said in a report tabled in the Parliament.

In April 2006, it entered into separate Operation, Management and Development Agreements (OMDAs) with Delhi
International Airport (Pvt) Ltd (DIAL) and Mumbai International Airport (Pvt) Ltd (MIAL).

Under the agreements, DIAL and MIAL are running the respective airports and share a revenue of 45.99 per cent and
38.7 per cent, respectively, with the AAI.

In DIAL, the majority stakeholder is GMR Group while in MIAL it is GVK Group.
On account of the failure to protect its financial interests in terms of the OMDA provisions, CAG said there has
seen “non-realisation of share of Rs 29.62 crore by AAI in the revenues of MIAL and DIAL”.
“AAI also sustained loss of interest to the extent of Rs 13.86 crore (till March 2015) on the unrealised amount,” it said.

The government auditor said MIAL and DIAL had set up a marketing fund in April 2010 and August 2012, respectively.
Subsequently, they started collected 0.5 per cent and 1 per cent, respectively from various concessionaires as marketing fund charges.

Till March 2015, the auditor found that MIAL collected Rs66.76 crore in this fund while the amount garnered by DIAL
stood at Rs 51.86 crore.

However, the amount was not shared with AAI. “… respective independent auditors while certifying revenue of MIAL and DIAL have been raising through the quarterly reports the issue of non-inclusion of the amount of marketing fund in the revenues of MIAL and DIAL,” the CAG report.

As per the auditor, despite such a fund being in contravention of OMDA provisions AAI did not object to it.

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