GMR’s fund gap could hit Delhi airport

New Delhi: Delhi International Airport Pvt. Ltd (DIAL), the operator of India’s flagship airport, New Delhi’s Indira Gandhi International Airport, has quietly warned the civil aviation ministry that work on the modernization of the country’s second-busiest airport may come to a halt in the next 45 days if the consortium is unable to raise funds, according to a senior ministry official.
This is the first time that DIAL, a GMR Infrastructure Ltd-led consortium managing the airport modernization since the summer of 2006, has warned of a financial crunch that could affect the Rs8,890 crore project.
GMR group chairman G. Mallikarjuna Rao told the ministry at a meeting last fortnight that DIAL has not been able to raise the required funds that it had expected to by leveraging real estate, and the problem has worsened with banks backing off from releasing agreed-to amounts as indicators such as passenger traffic, on which the loan was based, have changed drastically.
Amid a significant economic downturn, between July and November alone, the Delhi airport has seen a drop of 16% in domestic passenger traffic coupled with a 2% drop in international traffic.
Detailed questions sent on Friday to DIAL remained unanswered until late Sunday even though a spokesman had said Mint will get a reply on Saturday.
“It’s in a bad shape,” the same aviation ministry official said of the project, asking not to be named because he is not authorized to discuss internal matters with the media. This official added that GMR has told the ministry that the firm has some Rs200 crore for the project that “will last about 45 days”. The worst-case scenario GMR laid out, this official said, was that the project may come to a halt if government support doesn’t come through.
21/12/08 Tarun Shukla/Livemint

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Categories: Airports Dec 2008