GMR arm to develop airport land

In a move that could significantly dampen the revenue flow to the government, GMR Infrastructure group company’s Delhi International Airport Limited (DIAL) has passed on the licence to develop the land it received as part of the privatisation deal to a newly formed subsidiary.
DIAL had received 250 acres of land around the airport area to be developed commercially, with 46 per cent of the revenues accruing from it flowing back to the government (Airport Authority of India), and the rest to be utilised by the company for airport development.
In May this year, DIAL licensed the land to its newly formed 100 per cent subsidiary called Delhi Aerotropolis Private Limited (DAPL) which is responsible for developing the entire infrastructure. Currently, the company is in the process of selling the land rights to potential developers through a competitive bidding process.
“Since the sale consideration would be recognised in a “separate entity” (DAPL), the government would not be entitled to any share in this revenue,” GMR officials said.
To give a ballpark estimate, the income potential (present value of the life-time lease rentals) from one acre of land would be in the range of Rs 100 crore.
This would mean potential revenues in excess of Rs 25,000 crore for the 250 acres of land. Even after deducting certain expenses, the government should ideally be entitled to revenues of over Rs 10,000 crore.
16/08/07 N Mahalakshmi/Business Standard

To Read the News in full at Source, Click the Headline

Categories: Airports Aug 2007