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• An airport operator can expect to get an 18-20 per cent return on its equity for the project. That is if the recommendation of the Ministry of Civil Aviation is accepted by the Airports Economic Regulatory Authority (AERA). Sources said that the Ministry has drawn up a comprehensive list of conditions including the terrain in which the airport is located while taking a decision on whether the ROE should be 18 or 20 per cent, according to a Hindu Business Line report by Ashwini Phadnis and Shishir Sinha. Acceptance of the proposal will come as a boost to private sector airport operators including the Bangalore-based GMR Group which is leading a consortium taking up the development of Delhi airport.

• Delhi International Airport Ltd, the company managing the airport, has always maintained that it requires a seven fold increase in airport charges, a view not accepted by AERA. “Despite the continuous increase in traffic and competitive operations cost, DIAL is facing significant cash flow pressures. The charges at Delhi have been raised by just 10 per cent since 2000,” an industry analyst said justifying the proposed increase. Industry players, however, feel that a ROE of 20-24 per cent should be allowed given the high cost of raising funds in India.

• “Even in South America where the cost of funds is much lower than here, an operator is provided a return of at least 15 per cent,” sources said. Industry analysts argue that with airports sector being viewed as more risky than other infrastructure sectors like power, ports, roads a higher rate of return is justified.The Ministry was to have sent its response on ROE earlier this month but it was delayed as the Airports Authority of India had not sent its response. Now a final decision on the proposal is expected by the end of the month.

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