With Delhi International Airport Ltd getting over Rs 800 crore (Rs 8 billion) as a security deposit for less than half of the land in the 45 acre hospitality district planned around the airport, the civil aviation ministry may look at scaling down the airport development fee being levied to fill the funding gap in the modernisation of Delhi airport.
According to sources, DIAL, the GMR-led consortium modernising Delhi airport, had in its proposal for levying ADF projected it would get only a Rs 800 crore-Rs 1,000 crore (Rs 8 billion-Rs 10 billion) deposit for the entire 45 acre land in the hospitality district, leaving a gap in funding for the modernisation plan. As a result, the ministry allowed DIAL to raise Rs 1,820 crore (Rs 18.2 billion) in three years by levying ADF on passengers.
Passengers in Delhi have to pay an ADF of Rs 200 for domestic travel and Rs 1,300 for international travel.
However, sources say, DIAL has now managed to persuade the bidders for the hospitality district project to increase their security deposits by close to 50 per cent.
On Monday, it awarded the development rights for six out of the total 13 plots in the hospitality district to five companies, including Accor, InterGlobe Hotels, Lemon Tree, Bird Group and Hyatt (Saraf Hotels). These five will develop a total of 17-20 acres.
Sources said the remaining seven plots, where DIAL had not got a good response, would be put up for bids again.
"DIAL has been in discussion with the companies for sometime now, and they have agreed to increase the refundable security deposits by around 50 per cent. Every company would be now paying close to Rs 40 crore (Rs 400 million) per acre as security deposit," said a source close to the development. This means that for around 20 acres, DIAL will get close to Rs 800 crore (Rs 8 billion) in security deposits.
However, any decision on reduction in ADF can be taken only after August 31, when DIAL will submit its final cost estimates.
A DIAL spokesperson refused to comment on the security deposits the company got.
"The ADF has been approved to fund the deficit created due to the bleak response to the real estate project. If the response is better, the fee would obviously be scaled down," said a civil aviation ministry official.
