Authorities allow to deduct ADC from fee: GMR

Maldives authorities have allowed Male International Airport operator GMR Infrastructureto collect airport development and insurance charges from passengers, nearly a month after a local court barred the Bangalore-based company from doing so. 

In December, a Male civil court had stopped GMR from collecting airport development charge (ADC), saying it was identical to existing airport service charges being collected from passengers. 

GMR, which is overseeing the renovation of the airport, had earlier tried to include ADC in the airline ticket price, but the International Air Transport Association (IATA) had disallowed it. 

"We had a discussion with the ministry of finance, the Maldives government and Maldives Airports Company on the issue and are now allowed to collect both airport development and insurance charges, which will be adjusted against the revenue due to the government," said Siddharth Kapur, CFO, airport vertical, GMR Infrastructure. 

According to the concession agreement, GMR Infrastructure was allowed to charge $25 per passenger from the annual departing passenger count of one million, and a $2 insurance charge at the check-in counters starting January. The revenue was expected to amount to $25 million by 2012. 

GMR has greed to pay $520 million for a period of 25 years to the Maldives government. "Revenue paid to the government is higher than the ADC and insurance money to be collected by GMR and will now be used to service the debt that we have taken against the project," Kapur said. 

GMR has raised a debt of $358 million from the Singapore branch of Axis Bank to construct the $400-airport in Maldives, the single largest foreign investment in Maldives till date. The debt has a doorto-door tenure of 12 years with ballooning repayments over seven years, commencing June 2015. 

In June 2010, the GMR-led consortium won a bid from the Maldives government to build, operate, modernise and expand the Male airport for a period of 25 years, which was extendable by 10 years. GMR holds a 77% stake in the international airport through a joint venture between GMR and Malaysia Airports Holdings Berhad. 

Last month, the company started work on a new terminal that will have a capacity of five million passengers. It is expected to be ready by 2014. The annual passenger traffic at Male is about 2.5 million. GMR has renovated two lounges and expanded the baggage beltways at Male airport over the last seven months. 

It will now add eight check-in counters and two security lanes. GMR Infrastructure on Friday allotted 2,500 non-marketable, unsecured non-convertible debentures of face value of Rs 10,00,000 each, aggregating Rs 250 crore, to GMR Airports Holding.

The company's shares, which had hit a 52-week low after the court ruling, closed 0.44% higher at Rs 22.70 on the Bombay Stock Exchange SE on Friday.

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