Mumbai: The airport regulator's decision on a tariff hike proposal by the operator of Delhi's international airport may impact infrastructure projects as well as the civil aviation sector, Standard & Poor's Ratings Services said in a report on Tuesday.
"In our view, higher tariffs could negatively affect the credit quality and resilience of some low cost airlines operating out of Delhi. Large international full service airlines may reduce the number of flights to the city, but we don't expect them to cease operations to Delhi or move their hubs to lower-cost airports," Standard & Poor's credit analyst Rajiv Vishwanathan said in the report.
According to the report, the decision is likely to affect private sector participation in regulated capital intensive projects in India.
"The potential large increase in tariffs at Delhi airport emphasises the need for a detailed public-private participation policy and planning at all levels of the government," Vishwanathan said in the report.
Standardisation of procurement processes, transparency in bidding, proper risk allocation among the parties, adequate project preparation and feasibility studies, are the factors that make infrastructure projects more viable, the report said.
Private sector participants will be keenly watching the outcome, transparency, and time-frame of the regulatory process at Delhi airport, it added.
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