DIAL project under ministry scanner

New Delhi: The Delhi International Airport Pvt Ltd's (DIAL) ambitious 45-acre hospitality district project has come under the aviation ministry's scanner. The GMR-backed consortia has set up a subsidiary for providing infrastructure and will be directly charging for the same from successful bidders.
This will be in addition to a refundable security fee developers will pay to DIAL. Under the privatisation agreement, the developer has to share 45.9% of all revenue earned with the Airports Authority of India (AAI) and the ministry is examining if the business models adopted by DIAL could in any way subvert that clause.
A subsidiary formed to provide infrastructure in hospitality district, Delhi Aerotropolis Private Limited (DAPL), will charge about Rs 13 crore per acre for the job.
Both these charges - that will collectively lead to a revenue generation of Rs 2,835 crore for the consortia - have the ministry frowning. "The subsidiary can't charge Rs 13 crore individually per acre as this money may not even go to DIAL. Similarly, the security should also be shared with AAI and not just the lease rental that they will get in addition to this,'' said the official. Aviation secretary Ashok Chawla is learnt to be monitoring very closely that the revenue share model is strictly adhered to and the government does not lose money.
03/09/07 Saurabh Sinha/Times of India

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Categories: Airports Sep 2007