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DCA to explore new channels for financing

DUBAI - The Dubai Department of Civil Aviation (DCA) is to explore new channels for financing the remaining expansion at Dubai International Airport, according to a high-level DCA official in an interview in the trade magazine, Construction Week.

In cost terms, new financing might work out to around Dh13 billion or 87 per cent of the ongoing Dh15 billion project, said the publication in its latest issue.

A combination of funds from banks and other financial institutions and revenues streams generated in-house is likely to finance the rest of the expansion, said Khalifa Al Zaffin, DCA director for engineering and projects and the man in-charge of the on-going expansion at the airport, told the Construction Week published by ITP out of Dubai.

"So far, the expansion has been financed by the Government of Dubai. But now, we have been asked to self-finance the project," said Al Zaffin pointing out that the airport is currently going through a "commercialisation" process.

Formal negotiations on bank financing are expected to start from about the middle of this year. Funds are likely to begin to flow from about the third quarter and will continue until the end of the project by 2007 or 2008.

"We have already started working upon it in terms of studies. By summer, we will be able to present our proposals to various banks, which will from then on finance and fuel the expansion," Al Zaffin told Construction Week.

He said that the overall cost of the ongoing expansion is estimated at US $4.1 billion (Dhs15 billion). "So far we have spent around Dh2 billion," said the DCA director.

He pointed out that bank financing is expected to become available towards the end of 2004. "We have started initial talks with the banks. They are ready to finance us, but said that we have to present a proper business case that is realistic," Al Zaffin said.

Apparently, bank response has been encouraging, as the DCA director did not appear unduly concerned quoting the old adage that "taking money is easy. Paying back is the problem."

Asked if the DCA would consider going the international bond route as Emirates airline has so successfully done, Al Zaffin ruled it out saying enough resources could be generated in-house to part finance the expansion. "I don't think we need to go that way. Airports make money. All airports in the world are making money. Dubai International Airport, with a bit of fine tuning, can also generate enough money," the DCA director said