Delhi airport set to bleed Rs 825 crore
More than five years after it was privatised, the Delhi international airport - India's swankiest and most expensive - is likely to report a huge loss of Rs 825 crore in the fiscal year that ends next March, though it has successfully implemented its state-of-the-art Terminal 3. Tushar Srivastava reports. Loss beneath the glossbusiness Updated: Oct 03, 2011 02:19 IST
More than five years after it was privatised, the Delhi international airport - India's swankiest and most expensive - is likely to report a huge loss of Rs 825 crore in the fiscal year that ends next March, though it has successfully implemented its state-of-the-art Terminal 3 (T3).
Delhi International Airport Limited (DIAL), the GMR Group-led consortium that operates the airport, won the contract to run the airport for a 30-year-term in January 2006.
Its other members are the state agency, Airports Authority of India (AAI), German airport operator Fraport and Malaysia Airports Holdings Berhad.The consortium has run into several obstacles including a real estate slump that eroded its revenue opportunities linked to land available with the airport site and a subsequent controversy over airport development fees that passengers protested were unfair.
A company spokesperson who confirmed the loss told HT that as much of as Rs 450 crore of the estimated loss would constitute a cash loss resulting directly from a revenue shortfall in the current year's operations.
The company is stuck with an annual interest burden of Rs 600 crore it pays on Rs 5,266 crore it has raised in loans.
The staggering loss raise serious questions for DIAL and more importantly the GMR Group - the lead member of the consortium that holds a 54% stake in the company. The company is urging an increase in tariffs.
"A regulatory increase of aeronautical tariffs in line with signed concession documents is the most important way to ensure viability of DIAL. This is under discussion with the regulator," the DIAL spokesperson said.
The spokesperson said in response to questions from HT that the group believed in due diligence before pitching its bids, but was faced now with an extraordinary situation as the airport's viability was "dependent on conditions of the bid document being met by all parties."
DIAL said it is stuck with tariffs linked to the old AAI regime that has been unchanged since March, 2001, barring a 10% rise in 2009.
"The aero yield per passenger for DIAL is one of the lowest amongst comparable airports," the spokesperson said.
DIAL has also taken a Rs 350-crore depreciation following the commissioning of the T3, which has cut into its profitability.
"The full impact of depreciation has started hitting the bottom line with the operationalisation of T3 whereas the capacity utilisation is not full and tariffs are yet to be revised," the spokesperson said.