Delhi International Airport Ltd (DIAL), which constructed and operates Delhi airport, "over-engineered" the new Terminal-3 by building more floor space than stipulated under the master plan, says a cost audit report submitted to the Airports Economic Regulatory Authority (AERA).
The report points out that while DIAL's cost estimate for the project went up from Rs 8,975 crore to Rs 12,700 crore, a significant portion of that increase--around Rs 750 crore--was due to the construction of more floor space than originally approved. The audit report also points out that the cost estimates include Rs 350 crore for a new air traffic control tower, which DIAL has not yet built.
AERA had tasked public sector Engineers India Ltd (EIL) and global accounting advisory firm KPMG to prepare the report after being approached by DIAL for an extension in the period for which it could charge passengers an airport development fee. DIAL contended this was because the cost of the project had risen by Rs 3,725 crore.
A source in the aviation ministry said the airport developer "over-engineered"--simply put, built more space in--the terminal by 80,000 sq m. The area it was required to build under the master plan approved for the airport building by the government was 470,000 sq m. DIAL built 550,000 sq m. The report says assuming a cost of Rs 90,000 per sq m, the cost over-run was Rs 750 crore.
Responding to queries from Business Standard, a DIAL spokesperson stated: "This 'news' is entirely speculative and as per company policy, we would not want to comment on any speculative news at this stage."
The new T-3 has a capacity to handle 34 million passengers a year. DIAL is a joint venture led by Bangalore-headquartered GMR Group and includes state-owned Airports Authority of India, Germany's Fraport and Malaysian Airport Holdings.
"This amount of over-engineering in the terminal area cannot be justified, considering the master plan is made according to globally prescribed norms," said a source in the ministry, who did not wish to be identified.
While confirming that the report has been submitted, senior AERA officials did not want to comment on it, saying they would need at least a month to review its contents. Both KPMG and EIL also refused to comment, saying they are not authorised to talk on the matter.
In May, DIAL had asked AERA for a one-year extension to collect airport development fees to generate an additional Rs 2,500 crore. In March 2009, it was allowed to collect an estimated Rs 1,827 crore for 36 months.
Each domestic passenger flying out of IGI is charged Rs 200 and international passengers Rs 1,300. Delhi airport caters to over 70,000 passengers a day.