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User Development Fee Hike Unlikely At Chennai, Kolkata Airports

  • In a move that could provide relief to air travellers from Chennai and Kolkata, the Airports Economic Regulatory Authority (AERA) may not accept a proposal of the Airports Authority of India to levy a development fee (DF) on users of the two airports.The state-owned airport operator has approached the regulator seeking levy of the fee on flyers from the two airports, to partially offset the expenditure incurred in modernising the two metro airports.The AAI is said to have proposed a fee of about Rs 150 on every passenger departing from Chennai and Kolkata. The development fee is a pre-financing levy.

LAST RESORT

  • Sources indicated that the regulator feels the fee should be levied only as a “last resort” and when there is no other option left to bridge the gap in the funding of the project.In this context, there are sections in the AERA which feel that it makes little sense to allow the AAI to raise about Rs 150 crore through imposition of development fee when the entire cost of Rs 2,500-3,000 crore is being raised by the airport operator.
  • The AAI has been asked to send its tariff proposals to the AERA before a final view is taken on the issue. When contacted, the AERA Chairman, Mr Yashwant Bhave, merely said the proposal was under consideration and no firm decision had yet been taken.Meanwhile, the AERA is likely to take a view on the imposition of airport charges at eight other airports, including Thiruvananthapuram, Kozhikode, Jaipur, Lucknow, Guwahati, over the next year. The Airports Authority has submitted proposal for reviewing the charges.
  • “There has been no increase since 2001, except for a small increase of 10 per cent, which is negligible. Even if they seek an increase of, say, 200 per cent, it seems reasonable, as their other costs have gone up since then. But, at the same time, the traffic handled is also increasing. These will be examined before a final decision on increasing airport charges is taken,” sources said.The AERA considers charges for airports with annual traffic of 15 lakh or more. Now, it will issue a consultation paper for each of the airports. It will give the various stakeholders time to submit their views and then, accordingly, will come out with the final order.

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