CAG report on Mum airport: Officials make submissions to PAC

Civil Aviation Secretary Rajeev Nayan Choubey and Airports Authority of India (AAI) Chairman RK Srivastava today appeared before Public Accounts Committee to make their submissions on a report of CAG that found loopholes in implementation of a PPP project at Mumbai's CSI Airport.
The 22-member Public Accounts Committee headed by KV Thomas put a number of questions before the officials on issues raised by the CAG during the three-hour meeting where representatives of Civil Aviation ministry, AAI and Mumbai International Airport Limited (MIAL), which runs CSI airport, put forth their views on the CAG report of 2014.
MIAL is a 74:26 joint venture between a GVK-led consortium and AAI.

CAG in its report, said, "Neither the Operations, Management Development Agreement (OMDA) nor the lease deed signed between MIAL and AAI demarcated the land leased to MIAL.
"The PAC viewed that there is a need to formulate a clear- cut policy on how to carry out the PPP model in view of the recurring complaints of irregularities."
Meanwhile, as the above meeting continued for three long hours, a five-member sub-committee of the PAC, which had called representatives of Central Bureau of Investigation (CBI) to ask some questions on the CAG report on Commonwealth Games, had to cancel its meeting.

The audit watchdog had last year asked the government to review the financing structure and performance of MIAL as the project cost for development and upgradation work of terminals doubled due to inordinate delays and the funding gap, which was being addressed by levying development fee on passengers.

CAG, in its audit report, 'Implementation of Public- Private Partnership project at Chhatrapati Shivaji International Airport, Mumbai' tabled in Parliament in July last year, criticised the PPP model for development of the Mumbai airport as it stated that "the financing risk has not been effectively transferred to the private partner".
CAG had in its 'Performance Audit Report on Implementation of Public-Private Partnership Project' said that the government did not monitor the project effectively, leading to undue benefit of at least Rs 5,887 crore to MIAL, a consortium controlled by GVK Power and Infrastructure Ltd, during the ongoing modernisation of the airport that started in 2006.

Among those who appeared before the panel were Managing Director of MIAL, GV Sanjay Reddy, its CEO, Rajeev Jain, and Civil Aviation Joint Secretary, Arun Kumar.