The GMR Group-backed Delhi International Airport’s (DIAL) plans to develop a 45-acre hospitality district in the capital has hit an air-pocket. Airports Authority of India (AAI), which owns 26% in DIAL, is unwilling to raise the required fund of one thousand crore rupees for the proposed real estate development.
It was decided that all the stakeholders in DIAL would bring in funds in proportion to their equity holding in the company to part finance the project. This arrangement was opted after AAI raised its objection to GMR’s plan to collect security deposits from realty developers. DIAL is a joint venture between GMR (50.1%), AAI (26%), Fraport and Malaysian Airports (10% each) and IDFC (3.9%).
“AAI has said it would not pump in Rs 1,000 crore for the proposed real estate project. This would further hold the hospitality project at the airport,” a government official said. The dispute between AAI and GMR began last year when the former floated a subsidiary — Delhi Aerotropolis (DAPL) for the hospitality district. As per the plans, DAPL was to receive deposits of about Rs 2835 crore in lieu of leasing land to developers.
This revenue-generation model was objected by AAI saying it would reduce rent from realty developers and hence result into significant revenue loss to them.
The agreement stipulates that AAI will receive 45.9% of the revenue collected by DIAL. DIAL had earlier planned to build 3000-room hotel complex at the capital’s Indira Gandhi International (IGI) airport before the Commonwealth Games in 2010.
According to an estimate, Delhi currently faces a deficit of about 30000 hotel rooms. The airport developer is allowed to do commercial development at 5% land of over 5,000-acre Delhi airport. In the first phase of modernisation, DIAL plans to invest Rs 8,900 crore in building new terminals and a new runway.