Interest on AI dues: DIAL must seek AAI’s views

Jan 02 2013, 02:06 IST
Comments 0
SummarySharing of revenue has again run into dispute between Delhi International Airport Ltd (DIAL) and Airports Authority of India (AAI).

Sharing of revenue has again run into dispute between Delhi International Airport Ltd (DIAL) and Airports Authority of India (AAI). This time it is the interest paid by Air India to DIAL on its unpaid dues which AAI claims it too has a right to share.

While the civil aviation ministry had partially accepted DIAL’s contention, the minister has differed. Ajit Singh has returned the file with the observation that AAI’s views must be obtained before any decision is taken on the subject.

The ministry had suggested allowing DIAL to adjust the interest charged on AI dues with its own borrowing costs. But to maintain parity the ministry has asked DIAL to reduce the borrowing rate for the AI loan to 9.5 per cent from the current 12.

“The proposal sent to the minister did not have AAI’s view on the matter and the minister has returned it without approving. He has asked us to get AAI’s views on the issue and any call on the issue will be taken by the minister only after that,” said a senior civil aviation ministry official.

AAI is opposed any such arrangements and has opposed the proposal in the consultation meetings held in the ministry. The airport operator is of the view that the interest income earned on any dues should be shared with the airport operator as it is a part of the revenue. An agreement between AAI and DIAL on operations of Delhi airport say that the latter is to share 45.66 per cent of its total revenues with AAI and interest on dues is considered as revenues.

AAI, which maintains that this is against the principles of the agreement, had reported the matter to an oversight committee — the Operations Maintenance and Development Agreement Implementation Oversight Committee.

The airport operator also countered DIAL’s reluctance on sharing interest earned by saying that Mumbai International Airport Ltd, the consortium that operates the Mumbai airport, shares interest earned on Air India dues on a monthly basis.

The ministry’s proposal on bringing down the interest rates on dues to AI has not found acceptance. Industry insiders say that the ministry’s suggestion that DIAL and all other airport operators bring down the interest rate charged on Air India’s dues to a rate it pays on its borrowings on the working capital loans cannot be implemented.

Ads by Google

More from Business

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...