GVK unable to infuse additional equity in MIAL: Sources

Despite the civil aviation ministry showing remarkable urgency in seeking to abolish airport development fee (ADF), its efforts have hit a roadblock with Mumbai airport operator GVK expressing its inability to infuse additional equity into the joint venture (JV). CNBC-TV18’s Sumit Jha reports. 

CNBC-TV18 learns that GVK has written to Airports Economic Regulatory Authority (AERA) expressing its inability to infuse additional equity in Mumbai Airport. This comes after the JV partner Airport Authority of India (AAI) had proposed to put an additional Rs 113 crore into Delhi and Rs 293 crore into Mumbai Airport to bridge the funding gap and try and abolish ADF, which has been employed by these airports for up-gradation. Industry sources have told us that AAI cannot unilaterally invest money into these airports, into these JVs as it will require changes in the holding patterns of these airports. Mumbai International Airport Limited (MIAL) currently charges Rs 100 for domestic passengers and Rs 600 for international flyers and has sought a 700 percent hike in aeronautical charges from AERA on account of overshooting its budget. It was the civil aviation minister Ajit Singh who had directed AAI about a month ago to explore the possibility of investing into these airports so that the controversial development fee is not levied on the passengers. With GMR still to reply to regulator on additional funds for Delhi International Airport and MIAL putting its arms up, AERA definitely has a tough task of making ADF go away when it comes out with a final order by the end December.