Realty not to be part of Delhi airport plan

Plans to raise Rs 2,750 crore from stakeholders in proportion to their stake in Delhi airport.

GMR, the private developer of Delhi International Airport Ltd (DIAL), has decided to delink its controversial real estate project from the airport upgrade plan.

DIAL had earlier cleared a plan to raise refundable deposits of around Rs 2,750 crore from the developers of the real estate project (which includes hotels and commercial space) to part-fund the Rs 8,950-crore airport project.

It has now mooted an alternative plan "" which has been accepted in principle by the civil aviation ministry "" under which Rs 2,750 crore would be raised as equity from all stakeholders in proportion to their stake in the project.

According to sources in the government, the company said as the civil aviation ministry raised various objections over its refundable deposit scheme, the development of real estate had been put on hold for the time being.

However, financial institutions and banks, which were expected to disburse loans of Rs 4,950 crore, said they would not do so until the project's financial closure. This would have jeopardised the project.

Under the new scheme, GMR, which owns 50.1 per cent of DIAL, will have to pump in around Rs 1,386 crore (in addition to the Rs 593 crore according to the previous model).

The Airports Authority of India (AAI), which has a 26 per cent stake, will have to pay Rs 719 crore (in addition to around Rs 308 crore) while others will have to put in Rs 645 crore (in addition to the Rs 299 crore they have already committed).

The total equity infusion from all the shareholders will amount to around Rs 4,000 crore, up from Rs 1,200 crore earlier.

Originally, out of the total project cost of Rs 8,950 crore, Rs 1,200 crore was to come as equity, Rs 50 crore through internal accruals, Rs 4,950 crore as bank loans and Rs 2,750 crore as refundable deposits from the real estate plan.

However, the real estate project plan ran into troubled waters when DIAL insisted that the real estate deposits were not part of the topline revenues, which it is supposed to share with the AAI. It was being used as equity to finance the project, it said.

Both the civil aviation ministry and the AAI opposed the plan saying that not sharing the deposits would reduce the AAI's revenues considerably.

The matter was taken to the solicitor general, who gave his judgement in DIAL's favour under certain conditions.