rivate Shareholders Express
Inability To Bring Equity Or Raise Loans
Saurabh Sinha | TNN
New Delhi:Air travellers flying out of Delhi and Mumbai are unlikely to get any real relief from steep charges they pay for using these private airports.Aviation minister Ajit Singhs October 16 diktat to Delhi and Mumbai airports to stop charging airport development fee (ADF) has come a cropper with private shareholders of these airports refusing to bring equity or raise loans in order to stop charging ADF.In effect,they both want flyers to continue paying ADF in addition to the steep user development fee in Delhi.
The board of GMR-led Delhi International Airport (DIAL) met last Friday to discuss whether the ADF of Rs 200 and Rs 1,300 charged from each outgoing domestic and international passenger respectively could be scrapped.The ministry had estimated a funding gap of Rs 1,175 crore if ADF would have stopped from January 1 and had directed state-run Airports Authority of India (AAI),which has a 26% stake in DIAL,to infuse Rs 102 crore as equity towards meeting this gap.The AAI had agreed to do this.
The DIAL board met and decided against further equity infusion (in the project).We spoke to our lenders and they have informed us in writing that the project cant sustain more debt.Well inform Airports Economic Regulatory Authority (AERA) accordingly, Sidharth Kapur,GMR Airports chief financial officer,told TOI on Sunday.
Late last month,the GVK-led Mumbai International Airport (MIAL) had also expressed its inability to raise funds meant to be raised from ADF through debt or equity.Domestic and international flyers pay ADF of Rs 100 and 600,respectively.The ministry expected MIAL to face a financing gap of Rs 4,200 crore if ADF would have been abolished from January 1.It had directed AAI to pay its share of Rs 288 crore and the PSU had agreed.AAI is also abiding by Ajit Singhs directive of no ADF levy at the upcoming Chennai and Kolkata airports.
Incidentally,CAGs recent report on DIAL slammed levying ADF on flyers to fund the soaring cost of the project that went up 43% from the original Rs 8,975 crore in 2008 to Rs 12,857 crore two years later.The project was to originally built through a mix of debt and equity with no new burden on passengers.But,with cost going up,the aviation ministry in 2009 approved ADF of Rs 200 and Rs 1,300 (taxes extra ) for outbound domestic and international flyers respectively so that the new facility could be completed in time for Commonwealth Games 2010.
The CAG report had,in fact,pointed out that flyers will pay more towards funding the airport than the promoters.Out of the total capital expenditure of Rs 12,857 crore,the promoters equity has been Rs 2,450 crore out of which 26% (Rs 637 crore) was contributed by AAI and 74% (Rs 1,813 crore) was contributed by the other JV partners, the performance audit report had said.
Saurabh Sinha | TNN
New Delhi:Air travellers flying out of Delhi and Mumbai are unlikely to get any real relief from steep charges they pay for using these private airports.Aviation minister Ajit Singhs October 16 diktat to Delhi and Mumbai airports to stop charging airport development fee (ADF) has come a cropper with private shareholders of these airports refusing to bring equity or raise loans in order to stop charging ADF.In effect,they both want flyers to continue paying ADF in addition to the steep user development fee in Delhi.
The board of GMR-led Delhi International Airport (DIAL) met last Friday to discuss whether the ADF of Rs 200 and Rs 1,300 charged from each outgoing domestic and international passenger respectively could be scrapped.The ministry had estimated a funding gap of Rs 1,175 crore if ADF would have stopped from January 1 and had directed state-run Airports Authority of India (AAI),which has a 26% stake in DIAL,to infuse Rs 102 crore as equity towards meeting this gap.The AAI had agreed to do this.
The DIAL board met and decided against further equity infusion (in the project).We spoke to our lenders and they have informed us in writing that the project cant sustain more debt.Well inform Airports Economic Regulatory Authority (AERA) accordingly, Sidharth Kapur,GMR Airports chief financial officer,told TOI on Sunday.
Late last month,the GVK-led Mumbai International Airport (MIAL) had also expressed its inability to raise funds meant to be raised from ADF through debt or equity.Domestic and international flyers pay ADF of Rs 100 and 600,respectively.The ministry expected MIAL to face a financing gap of Rs 4,200 crore if ADF would have been abolished from January 1.It had directed AAI to pay its share of Rs 288 crore and the PSU had agreed.AAI is also abiding by Ajit Singhs directive of no ADF levy at the upcoming Chennai and Kolkata airports.
Incidentally,CAGs recent report on DIAL slammed levying ADF on flyers to fund the soaring cost of the project that went up 43% from the original Rs 8,975 crore in 2008 to Rs 12,857 crore two years later.The project was to originally built through a mix of debt and equity with no new burden on passengers.But,with cost going up,the aviation ministry in 2009 approved ADF of Rs 200 and Rs 1,300 (taxes extra ) for outbound domestic and international flyers respectively so that the new facility could be completed in time for Commonwealth Games 2010.
The CAG report had,in fact,pointed out that flyers will pay more towards funding the airport than the promoters.Out of the total capital expenditure of Rs 12,857 crore,the promoters equity has been Rs 2,450 crore out of which 26% (Rs 637 crore) was contributed by AAI and 74% (Rs 1,813 crore) was contributed by the other JV partners, the performance audit report had said.
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