On CAG Reports on UMPP & PPP for IGIA



The three final reports of the CAG on allocation of coal blocks, Ultra Mega Power Projects (UMPP) under Special Purpose Vehicles and on implementation of public-private-partnership for Indira Gandhi International Airport in Delhi have shocked the nation.

 

The report on implementation of airport brings out two major areas of wrong doing which was facilitated by the Ministry of Civil Aviation and the Airport Authority of India (AAI). For an equity contribution of Rs. 2,450 crores, the private entity was allowed rights of commercial exploitation of 240 acres of land. The potential revenue from this land as licence fee for 58 years was projected by Delhi International Airport Ltd (DIAL) itself at Rs. 1,63,557 of which DIAL share would be Rs. 88,337 crores. An additional land of 190.19 acres was leased out for a paltry one time payment of Rs. 6.19 crores. This is far less than even what has been charged from government institutions like Director General of Civil Aviation (DGCA) and Bureau of Civil Aviation Security (BCAS). Apart from this, post-bid, post-contractual benefits to the private JV partner is clearly an instance of violation of the tendering process and complicity.

 

Further, the Ministry of Civil Aviation and later Airport Economic Regulatory Authority (AERA) allowed DIAL to collect development fees of Rs. 3,415.35 crores. The February 2009 order of the Civil Aviation Ministry is clearly a contravention of the Operation Management and Development Agreement (OMDA), AAI Act and the AERA Act. CPI(M) members in the Parliament had raised all these issues and brought it to the notice of the Prime Minister that these are grave violations of the statutory provisions almost a year back. But no attempt was made by the government to reverse this blatant act of wrong doing.

 

On the UMPP, the CAG has found major post-bid violation by allowing Reliance Powers Ltd. (RPL) to use excess coal from the three coal blocks allocated to the Sasan UMPP which not only vitiated the bidding process but also resulted in undue benefit to RPL. The CAG report clearly pinpoints that the overall financial largesse to RPL due to this act of commission amounts to Rs. 29,000 crores.

 

It is shocking that how the government nonchalantly has responded to the reports by a Constitutional Authority questioning them on grounds of Constitutional mandate. The sordid story of crony capitalism has become a hallmark of the UPA-II government. The government which comes out with tight fists over spending on food and nutrition security of the people take such a `couldn’t care less’ attitude over such huge losses to the public exchequer while benefiting corporates.

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Prof.K.Nageshwar
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