Delhi airport upgrade under cloud

New Delhi: Delhi International Airport Ltd (DIAL), the GMR-led consortium that is modernising and operating India’s busiest airport, is seeking to change its lead banker from private sector ICICI Bank to government-owned Canara Bank even as serious questions are being raised about the project’s financial viability.
The company is facing difficulties raising further loans to complete the Rs 8,890-crore project, scheduled to be ready by March 2010, owing to the reluctance of some promoters to augment equity, heavy revenue-sharing commitments and lower-than- expected revenues.
Delhi airport is the first of the country’s airport to start work on a modernisation plan under a public-private partnership. The DIAL consortium comprises Bangalore-based GMR Infrastructure (50.1 per cent), Fraport AG and Malaysia Airport Holding Berhad (10 per cent each), India Development Fund managed by IDFC (3.9 per cent) and the Airports Authority of India (AAI), which has 26 per cent stake.
Of the sanctioned loan of Rs 4,940 crore, DIAL has raised Rs 2,500 crore; by the end of March, it needs to raise a total of Rs 3,807 crore.
The problem is the contribution toward equity by the promoters. Under the original plan, the equity portion was Rs 840 crore till March 2010 and it needed to raise a deposit of Rs 3,110 crore by leasing land for hotels around the airport. This was to be treated as quasi-equity. The promoters have contributed toward equity Rs 700 crore till now but have not been able to raise the full lease deposit.
Banks, therefore, are asking the company to replenish the lease deposit by equity.
20/01/09 Arun Kumar/Business Standard

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Categories: Airports Jan 2009