Airports facelift cost doubles

New Delhi: The modernization cost of the airports at Delhi and Mumbai is set to almost double to nearly Rs20,000 crore, with passengers to continue to foot the bill for the steep escalation in the privatization projects kicked off in 2006.
The increased costs are disclosed in letters written by the developers to the Airports Economic Regulatory Authority of India (Aera) and reviewed by Mint. The Delhi airport upgrade is estimated to cost about Rs10,500 crore and could escalate further, while the Mumbai airport upgrade has been put at Rs9,802 crore.
In October 2006, six months after the projects were awarded, the cost estimated for the first phase by Delhi International Airport Pvt. Ltd (DIAL) was Rs5,900 crore and Rs5,826 crore by Mumbai Airport International Pvt. Ltd (Mial), according to the aviation ministry.
“It is excessive,” said Robey Lal, a former board member of the Airports Authority of India (AAI) that owns and runs most of the country’s commercial airports, adding that the increased costs will eventually be passed on to passengers.
DIAL, set up by a GMR Infrastructure Ltd-led consortium, has asked for another extension from Aera for submitting its final costing.
The deadline for this had been mandated as August by the civil aviation ministry in February when it allowed the airport operator to charge a development fee (DF) of Rs1,300 per departing international passenger and Rs200 per departing domestic passenger until 2012, adding up to revenue of Rs1,827 crore in total. It will arrive at a final figure only by February next year, close to the end of the project’s timeline.
24/09/09 Tarun Shukla/Livemint

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Categories: Airports Sep 2009