DIAL may hike usage fee as borrowing costs rise

New Delhi: The global financial crisis could well end up raising airport usage charges at Delhi. Even as the GMR-promoted Delhi International Airport (DIAL) races to complete a brand new airport before the scheduled deadline that expires seven months from now, a clutch of foreign and domestic banks that had agreed in December 2007 to finance DIAL’s external commercial borrowing of $350 million are now baulking at the agreed rate of 185 basis points over the London Inter-Bank offered rate (Libor).
While DIAL is exploring alternative options, it is unlikely to get a rate lower than 300 basis points over Libor, raising its cost of capital. Since the airport tariffs are to be fixed taking into account the weighted average cost of capital, a rise in tariffs is on the cards.
DIAL is a special purpose vehicle (SPV) that was formed in 2006 in which GMR Infrastructure own the majority stake. GMR group won the bid in 2006 to modernise the Delhi airport.
DIAL has increased the project cost by Rs 1,250 crore to Rs 10,225 crore from original projection of Rs 8,975 crore, which is funded through equity contribution by all the existing shareholders including Airport Authority of India (AAI) on pro-rata basis.
01/08/09 Arun Kumar/Economic Times

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Categories: Airports Sep 2009