AG favours DIAL's fundraising

In a development that could speed up the about Rs 9,000 crore (Rs 90 billion) Delhi Airport modernisation work, the attorney general has supported project promoter GMR Group's plan to take advances from commercial developers.

Responding to queries raised by the civil aviation ministry, Attorney General Milan Banerjee has said in his report: "There is no impediment on (GMR Group firm) DIAL on accepting refundable security deposits from developers" as a part of means to finance its obligations under the agreement for the project.

The report may help Delhi International Airport Ltd) achieve financial closure for the Rs 8,900 crore (Rs 89 billion) project for which the company has proposed to raise Rs 3,144 crore (Rs 31.44 billion) by way of trade advances and deposits. 

"Raising of refundable deposits should not be seen as any substitution of revenues or a foul play on the part of DIAL," the AG is understood to have said in his report to the ministry earlier this

week on a query whether DIAL could raise resources through refundable security deposits and to what extent.

While officials of civil aviation ministry could not be contacted for comments, a spokesperson of DIAL, which is pursuing the ministry for expeditious clearance of its proposal for meeting the project deadline of 2010, said the firm was unaware of what had transpired between the civil aviation and law ministries.

"We are, however, hoping that the matter would be expedited at the earliest," the spokesperson added.

DIAL has already received bids from about 40 aspirants, including national and global hospitality players and commercial developers, for a pie in the project, but the promoter was unable to take a call in view of the resistance from the aviation ministry on the ground that the quantum of advance sought would eat into the revenue.

GMR-led consortium holds 74 per cent in the project, while the remaining 26 per cent is held by the Airports Authority of India.