GMR proposal to levy UDF on arriving pax rejected

The Airports Economic Regulatory Authority  (AERA) has turned down the Rajiv Gandhi International Airport operator GMR’s proposal of levying User Development Fee (UDF) on arriving passengers here.

The airports regulator rejected the move by GMR Hyderabad International Airport (GHIAL), a subsidiary of GMR Group, saying it is against the concession agreement GMR had with the government.

“The authority has noted in para 23.92...that GHIAL’s proposal of levying UDF on both departing and arriving passengers is at variance with the provisions of the Concession Agreement. The authority therefore has proposed to determine UDF only from the departing passengers as is indicated in the Concession Agreement,” AERA said in its observation.

GMR recently approached the AERA for tariff revision.

GMR is charging Rs 430 and Rs 1,700 per embarking domestic and international passenger, respectively.

The AERA allowed them purely on an ad-hoc basis, with effect from November 1, 2010, for a period of five years.

According to the consultation paper issued by AERA, GMR said UDF is proposed to be levied on both arriving and departing passengers (except on transfer/transit pax and infants) to ease the burden on outgoing passengers.

GMR wants to charge Rs 2,213.27 and Rs 1,437.80 under 'dual till' from arriving and departing international passengers (non-SAARC countries). The airport operator said that passengers travelling to or from SAARC countries are proposed to be levied UDF at domestic metro rates in both single and dual till models.

GMR wanted AERA not to adopt 'single till' model for tariff determination. Under single-till approach, an operator's total revenues from non-aeronautical operations like retail shops, real estate development and car parking are taken into consideration to determine user charges for passengers and airlines. A GMR spokesperson said the proposed dual till model was based on the concession documents of Hyderabad airport and globally, the model is  predominant in privatised airports.

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