Govt nixes Delhi airport debt plan

The Union government has shot down an ambitious debt-raising plan by Delhi International Airport Ltd, or DIAL, to part-finance the modernization of the airport in the Capital by seeking deposits and selling bonds to private developers looking to lease space at India’s second busiest airport.
Through its Delhi Aerotropolis Pvt. Ltd unit, DIAL had planned to secure a Rs2,835 crore refundable deposit for a period of 28 years, apart from a licensing fee, for leasing out 45 acres of land to realty firms through a bidding process initially planned for this month.
A deal structured thus would have reduced the revenues of DIAL while easing financing costs. But, DIAL is to share nearly 46% of its revenue with the government, which would have ended up getting less money than anticipated under a 2006 privatization deal.
The ministry of civil aviation has concluded that DIAL’s financing method would reduce substantially the shared revenue for the state-owned Airports Authority of India, or AAI, because the security deposit and bonds may not be treated as revenue which the government can lay claim to.
“It is just not going to be allowed (and) it has been communicated (to DIAL),” said a senior government official familiar with the process who didn’t want to be named.
DIAL says it remains confident the issues would be resolved.
14/09/07 Tarun Shukla/Livemint

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Categories: Airports Sep 2007