New Delhi. The government has announced it will scrap charging airport development fees (ADF) meant to cover the funding gap for the development of Mumbai and New Delhi airport from Jan 1, 2013.
Currently, the ADF charges are Rs.200 per domestic passenger and Rs.1,300 per international passenger at Delhi airport, and Rs.100 per domestic passenger and Rs.600 per international passenger at Mumbai airport.
These charges are part of an agreement signed between the two private players, who manage the New Delhi and Mumbai airports, and the government for the modernisation of the aeronautical infrastructure at the two cities.
The IGI airport operator, Delhi International Airport Limited, had submitted the total cost of modernising the IGI airport at Rs.12,857 crore against the original cost of Rs.8,957 crore it gave to the civil aviation ministry in 2009.
On April 24, the Airport Economic Regulatory Authority (AERA) allowed an escalation of 345 percent in aeronautical charges which allows the operator to collect Rs.200 from departing domestic and Rs.1,300 from departing international passengers. The charges became applicable in May.
According to the Civil Aviation Ministry, the proposal will be carried out by infusion of fresh funds from the Airports Authority of India (AAI) which is a part owner of the Delhi and Mumbai airport.
“Civil Aviation Minister Ajit Singh has directed AAI to infuse more equity in Mumbai and Delhi airports and accordingly submit its proposals to AERA,” the ministry said in a statement Oct 16.
However, the proposal comes with a rider that the ADF will stand abolished only if funding gaps are met with equity infusion and raising of loans by the airport operators.
If ADF is abolished from Jan 1, 2013, the finance gap of Rs.4,200 crore is expected in case of Mumbai and Rs.1,175 crore in case of Delhi airport.
AAI has been directed to infuse additional equity of Rs.288 crore in case of Mumbai airport against its 26 percent share in equity of MIAL.
“Similarly in case of Delhi to fill the balance in financing gap, AAI will contribute equity share of Rs.102 crore,” the statement added.
The balance in financing gap of the project will have be met by the airport operator through infusion of their share of equity.
Earlier, the ministry had directed AAI not to levy ADF at the Chennai and Kolkata airports. AAI had submitted proposals to AERA for levying ADF of Rs.300 per embarking domestic passenger and Rs.1,000 per embarking international passenger at Chennai and Kolkata airports.
The modernization and expansion of Kolkata and Chennai airports is currently underway, on expenditure budgets of Rs.2,325 crore and Rs.2,015 crore respectively.
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