AIR­PORT UDF TO FUND KIA’S GROWTH

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Air pas­sen­gers ex­pect­ing relief from User De­vel­op­ment Fee (UDF) levied by the Kempegowda In­ter­na­tional Air­port (KIA) could be dis­ap­pointed if the state govern­ment’s re­quest to main­tain sta­tus quo is ac­cepted. At the con­sul­ta­tion or­gan­ised by the Air­ports Eco­nomic Reg­u­la­tory Au­thor­ity of In­dia (AERA), the govern­ment had con­tended that tar­iff re­duc­tion at this stage would ad­versely af­fect KIA’s fu­ture ex­pan­sion and growth. AERA had ex­cluded forth­com­ing air­port projects worth 1,212 crore while con­sid­er­ing the cap­i­tal ex­pen­di­ture for de­ter­mi­na­tion of aero­nau­ti­cal tar­iff. It cited the ex­pen­di­tures on the East­ern tun­nel, a third en­try pro­posed for the KIA, a 220kV sub­sta­tion and ter­mi­nal up­grades. “The ex­cess rev­enue col­lected can be trued up in the next con­trol pe­riod and will smoothen the higher tar­iffs that are ex­pected in the third con­trol pe­riod due to higher cap­i­tal­i­sa­tion,” it sub­mit­ted. This would also mit­i­gate tar­iff spikes and shocks, it said. “It may be now dif­fi­cult for fur­ther eq­uity in­fu­sion and there­fore, the ex­pan­sion projects have to be com­pleted through ex­ter­nal bor­row­ings and aug­mented rev­enue.” The Air­line Op­er­a­tors Com­mit­tee (AOC), Ben­galuru echoed the govern­ment’s po­si­tion, con­tend­ing that air­lines are in con­stant need of ad­di­tional in­fra­struc­ture and up­scal­ing of fa­cil­i­ties. Cit­ing the KIA’s dou­bledigit pas­sen­ger growth, the AOC noted “The sit­u­a­tion is ac­tu­ally wor­ri­some with av­er­age hold­ing time of up to 20 min­utes.” Ur­ban mo­bil­ity an­a­lyst San­jeev Dya­man­navar sub­mit­ted that even af­ter get­ting 4,000 acres of land from the govern­ment, the BIAL man­age­ment had not come up with any real es­tate plans to gen­er­ate suf­fi­cient in­come. Once the air­port metro line opens, he wants all pas­sen­gers trav­el­ling on it to be levied a premium ser­vice charge to re­duce UDF bur­den.

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