New Delhi: The operator of the Indira Gandhi International Airport in New Delhi has raised Rs1,472 crore from the sale of 45 acres of land to developers, 61% more than the Rs912 crore it had expected from the sale last year, an official said.
GMR Infrastructure Ltd-led Delhi International Airport Pvt. Ltd (DIAL), which operates the airport and is modernizing it, is still likely to seek a further extension to submit the total cost of the first phase of the modernization, the DIAL official said on condition of anonymity.
The money raised from leasing land to hotel chains such as Accor Hotels, Bird Group-Dusit Thani Group and Lemon Tree Hotel will be used to offset part of the project cost.
Photo by Ramesh Pathania; Graphic by Paras Jain/Mint
The DIAL official said the company has hired an auditor to arrive at the project cost, which it has to submit to the Airports Economic Regulatory Authority (Aera), the airports watchdog established last year.
The auditing would need at least six weeks more and DIAL may seek another extension from the regulator, he added.
“The process is on,” a DIAL spokesperson said. “The independent auditors are at it.”
In 2009, DIAL had said the cost of the first phase of the airport project, which ends on 31 March, may escalate from Rs10,500 crore. It was asked to submit the project cost by January. This deadline was later extended to January-end.
The project cost is important because passengers and airlines will be taxed based on this cost.
“It’s a conjecture to make an estimate right now,” the DIAL official said.
Aera has asked DIAL to submit the cost immediately, said a government official familiar with the matter.
A reply from DIAL is awaited and “no timeline has been indicated to us”, said this official, who, too, didn’t want to be named.
When the Delhi airport was privatized in 2006, the cost estimated by DIAL for the first phase of modernization was Rs5,900 crore. No limits were applied to the final cost when the airport was privatized.
DIAL’s consortium members include Frankfurt airport operator Fraport AG, a unit of Malaysia Airports Holdings and the Airports Authority of India.
Analysts say the privatization agreement is built in a way that most of the costs would eventually be squeezed from passengers using the airport.
Passengers are already paying a development fee of Rs1,300 each time they fly abroad, or Rs200 for domestic travel until 2012, adding up to an estimated Rs1,827 crore.
The fee can be reviewed only after the project cost is submitted.
DIAL plans to commission a third integrated terminal, which is to begin commercial operations by the first week of July. This terminal, spread over 5 million sq. ft, would have a capacity to handle 34 million passengers.