Airports authority says it won't finance DIAL bailout

New Delhi: The Airports Authority of India (AAI) has rejected a move to bail Delhi International Airport Ltd (DIAL) out of a financial crisis by extending it a Rs 350 crore loan at nine per cent rate of interest.
The proposal was mooted at a Prime Minister’s Office (PMO) meeting, chaired by the principal secretary to the prime minister in August.
AAI has also not accepted another proposal to let DIAL pay its share of revenue on a ‘cash’ basis, saying it was not found to be in conformity with its accounting principles. Paying on a ‘cash’ basis would mean the payment would be made based on actual revenues, excluding dues from Air India.
DIAL has been facing a cash crunch because the state-owned Air India has not paid dues of over Rs 250 crore. However, the company has to pay its 45.99 per cent revenue share to joint venture partner AAI at the beginning of the month, based on normal revenue projections.
During the meeting at the PMO chaired by its principal secretary, it was decided that AAI, being one of the shareholders of DIAL, may explore various possibilities, including a short-term loan, to avoid the risk of the airport facing financial problems on account of non-payment of dues by Air India.
03/10/11 Surajeet Das Gupta & Mihir Mishra /Business Standard

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Categories: airports Oct 2011