Cash-starved DIAL may get govt lifeline

New Delhi: The Centre may extend a lifeline to GMR group-led Delhi International Airport, the cash-starved operator that handles the modernisation work at New Delhi’s Indira Gandhi International Airport.
Cabinet secretary KM Chandrasekhar will on Tuesday preside over a meeting of officials of the ministries of civil aviation and finance to find ways to help Delhi International Airport Ltd (DIAL), led by Bangalore-based GMR group, to raise funds.
Some of the options before the government — such as levying of airport development fees (ADF) and user development fees (UDF) from passengers and increasing the aeronautical charges by 10% — are expected to make air travel from Delhi airport costlier. DIAL has proposed to levy an ADF of up to Rs 300 from outbound domestic travellers and Rs 1,000 from international passengers.
Financial problems of the operator threaten to delay the prestigious project. “The matter is very serious now. The airport developer will exhaust all funds in the next few months. If something is not worked out soon, the project would be delayed and the prestige of the country would be at stake,” said a civil aviation ministry official who asked not to be named.
DIAL’s problems started when banks showed reluctance to lend quoting a liquidity crunch in the market. The operator has estimated a fund deficit of about Rs 2,500 crore that may cause delays ahead of the Commonwealth Games in 2010.
GMR group chairman GM Rao had earlier sought help from the government to raise funds from banks. Mr Rao had also met civil aviation minister Praful Patel some time back to discuss the financial problems.
23/12/08 Nirbhay Kumar/Economic Times

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Categories: Airports Dec 2008