GMR's Delhi hospitality project hits AAI hurdle

New Delhi: The GMR Group-backed Delhi International Airport’s (DIAL) plans to develop a 45-acre hospitality district in the capital has hit an airpocket. Airports Authority of India (AAI), which owns 26% in DIAL, is unwilling to raise the required fund of Rs 1,000 crore for the proposed real estate development.
It was decided that all the stakeholders in DIAL would bring in funds in proportion to their equity holding in the company to part finance the project. This arrangement was opted after AAI raised its objection to GMR’s plan to collect security deposits from realty developers. DIAL is a joint venture between GMR (50.1%), AAI (26%), Fraport and Malaysian Airports (10% each) and IDFC (3.9%).
“AAI has said it would not pump in Rs 1,000 crore for the proposed real estate project. This would further hold the hospitality project at the airport,” a government official said. The dispute between AAI and GMR began last year when the former floated a subsidiary — Delhi Aerotropolis (DAPL) for the hospitality district. As per the plans, DAPL was to receive deposits of about Rs 2,835 crore in lieu of leasing land to developers.
18/06/08 Nirbhay Kumar/Economic Times

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Categories: Airports Jun 2008