Delhi International Airport Ltd (DIAL), an arm of infrastructure major GMR Infrastructure, seems to have hit a dead-end on fund-raising to develop the airport in the capital.

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The company is pinning hopes on the continuance of the airport development fee (ADF), a proposal for which is pending with the Airports Economic Regulatory Authority (AERA).

“We are not in a position to raise any further equity because other members of our consortium have issues. The lenders are not comfortable about raising more debt since serviceability is seen an issue. So we are left with no option but to take the ADF route to bridge the gap in funding,” Sidharth Kapur, GMR’s chief financial officer (airports), told DNA.

The company had originally started the project of modernising the Delhi airport with an outlay of `9,000 crore. But following changes in the design of the project, the cost shot up to Rs12,800 crore.

GMR had then sought the government’s permission to impose an ADF and it was allowed to collect Rs200 from domestic passengers and Rs1,300 from international passengers for 36 months from the date of approval in 2009.The approval was to raise about Rs1,827 crore in the form of ADF.

“We have already deployed Rs2,450 crore through equity and Rs5,300 crore in the form debt at an average interest rate of about 11%. More than the debt-equity issues, there would be stress on the balance sheet in case the equity or debt is further increased. We already have a high revenue share agreement at about 46% with the government,” Kapur said.

The Airports Authority of India (AAI) owns 26% of DIAL, while GMR holds 50.1%. Frankfurt airport operator Fraport AG and a unit of Malaysian Airports Holding own 10% each in addition to India Development Fund’s holding of about 3.9%.

The ADF money is deposited in an escrow account. “We must have so far collected about Rs1,100 crore on an NPV (net present value) basis,” he said.

Now, with the originally sanctioned ADF limit of Rs1,827 crore too proving insufficient to bridge the capex gap, the company is seeking an additional Rs1,700 crore through ADF.

“We are seeking an extension of ADF tenure, which is set to expire soon. We are keen on getting an extension for another two-and- a-half years. However, the tenure of ADF collection would depend on the traffic,” Kapur said.

For the year to March 2011, DIAL has suffered a net loss of Rs240.4 crore on a revenue of Rs1,243.2 crore.

GMR’s total losses from its airports business is Rs221.2 crore (after adjustments) on a consolidated gross revenue of Rs3,046.9 crore.

The AAI, which has so far invested Rs637 crore to hold 26% stake in DIAL, has recently expressed its inability to invest any further.

In a latest communication to the AERA, the AAI member-planning, Sudhir Raheja, said, “AAI is not in a position to make any further contribution towards equity due to its commitment in its ongoing projects for upgradation and development of metro and non-metro airports.”

Though expressing no objection for other partners in the venture contributing equity, the AAIsaid that the fresh equity would not have any impact on the quantum of its equity holding in the company.