Determining tariff: AERA says it is studying stakeholders’ response

Chairperson of the Airports Economic Regulatory Authority of India (AERA) S. Machendranathan has said the authority will take a final call on determining aeronautical tariff, which includes the user development fee (UDF), at the Kempegowda International Airport (KIA). A decision is likely to be reached within a fortnight.

A top official of the AERA told the
The Hindu
that at present the authority was studying the response it had received from stakeholders.

“Various stakeholders, including Bangalore International Airport Ltd. (BIAL) and citizens’ groups, have given their response to a consultation paper. We are studying their response on capital expenditure and others,” said a senior official. On June 18, the AERA had held a consultation meeting with the stakeholders here.

The AERA had earlier proposed a reduced UDF of Rs. 316.8 for international departure passengers and Rs. 79.2 for domestic departure passengers. Currently, BIAL charges UDF of Rs. 1,537.08 for all international departure passengers and Rs. 384.27 from domestic departure passengers. If the AERA reduces the fee, air tickets will become cheaper for those travelling from the KIA.

BIAL for status quo

With over Rs. 11,000 crore expected to be spent on enhancing the capacity of the airport through a new terminal, BIAL has sought for continuing the existing UDF for the next five years to raise revenues.

In its submission, BIAL said it was in the process of “undertaking huge capital investment” to cater to the high growth in traffic. While regulators allow for higher tariff and an increase after the execution of the project, there is a need for cash during the project execution, said BIAL.

The State government has favoured continuing the existing tariff.

The Infrastructure Development Department of the State government, too, in its response to the AERA stated that “a certain stand taken on the tariff and capital expenditure might have an adverse impact on the timely completion of the expansion projects of BIAL”.

‘Revision overdue’

Sanjeev V. Dyamannavar, transportation expert who has given his to response to the AERA, said, “The UDF was due for revision in April 2016. BIAL, however, has been collecting the fee in excess for 27 months. The AERA should either make the fee completely nil or reduce it. Surprisingly, in their response, the both the BIAL and the State government have not made any mention of the metro linking to the airport which is very crucial in the response.”

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