Govt set to re­form tar­iff struc­ture for fu­ture air­ports

Hindustan Times ST (Jaipur) - - World - Tarun Shukla tarun.s@livemint.com

SEV­ERAL AIR­PORT DE­VEL­OP­ERS HAVE RUN UP COSTS IN EX­CESS OF ES­TI­MATES, AND

THEN HAD TAR­IFFS CHANGED UP­WARDS TO COM­PEN­SATE

The civil avi­a­tion min­istry is con­sid­er­ing men­tion­ing how much air­port op­er­a­tors could earn through so-called aero­nau­ti­cal rev­enue from air­ports whose de­vel­op­ment con­tracts are be­ing bid out in an at­tempt to end reg­u­la­tory un­cer­tainty over tar­iffs, and re­duce tar­iffs for both pas­sen­gers and air­lines.

The rev­enue of air­port op­er­a­tors in­cludes those re­lated to flight op­er­a­tions (aero­nau­ti­cal rev­enue) and from other op­er­a­tions at the air­port such as re­tail. Cur­rently, bid­ders de­velop the air­port and then seek per­mis­sion to levy a cer­tain tar­iff from the min­istry or the Air­ports Eco­nomic Reg­u­la­tory Author­ity (AERA).

Un­der the new plan the avi­a­tion min­istry plans to change the Air­ports Author­ity of In­dia (AAI) act and AERA rules to en­sure that all air­ports whose de­vel­op­ment con­tracts are be­ing bid out have a pre-de­ter­mined tar­iff.

“If aero­nau­ti­cal tar­iff is pre-de­ter­mined in the bid doc­u­ment then AERA’s de­ter­mi­na­tion will not be nec­es­sary,” said a avi­a­tion min­istry of­fi­cial who did not wished to be named said. “It will re­move reg­u­la­tory un­cer­tainty.”

Air­port in­vestors will not have to come and “beg AERA or the avi­a­tion min­istry” for a cer­tain tar­iff, this per­son added. Nor will they have to put up with dis­cre­tionary changes that ac­com­pany any change in govern­ment.

The move will ap­ply only to new air­port de­vel­op­ment con­tracts, which means it will not af­fect AAI, which runs most of the civil­ian air­ports in the coun­try; the GMR In­fra­struc­ture Ltd-led Delhi, Hyderabad air­ports, and the new Goa air­port; the GVK Power & In­fra­struc­ture Ltd led Mum­bai or Navi Mum­bai air­port; and the Fairfax-led Ban­ga­lore air­port.

The avi­a­tion min­istry is ex­pected to move a Cab­i­net note on this shortly.

For pas­sen­gers and air­lines this could mean cheaper air­fares and aero­nau­ti­cal charges.

“The bid doc­u­ments will say what build­ing we want, the ser­vice de­liv­ery re­quired, and the aero­nau­ti­cal rev­enue we will give; the bid­der will bid based on all this. It will make the project vi­able,” the of­fi­cial cited in the first in­stance said.

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