Airport UDF hike likely from Oct 1

Last Updated 19 September 2013, 22:06 IST

User Development Fee (UDF) levied from air passengers at Bengaluru International Airport (BIA) is likely to be revised from October 1. The deadline for all the stake-holders to file their objections and responses to the consultation paper on the tariffs proposed by the Airport Economic Regulatory Authority (AERA) ended on Thursday. 

The AERA had earlier rejected a Bangalore International Airport Limited (BIAL) proposal to hike the UDF by 240 per cent for domestic and by 70 per cent for international passengers.

In its Consultation Paper, the Authority instead proposed Rs 262.32 for domestic and Rs. 1,049.27 for passengers heading out and arriving from foreign destinations to BIA.

AERA had proposed the fees on a Single-Till model, where both aeronautical and non-aeronautical charges are considered to fix airport charges. Responses were sought from BIAL share holders, the State Government, Government of India, International Air Transport Association (IATA) and the Private Airport Operators Association. Last month, the State Cabinet conveyed to the Authority that it had no objection to a hike in UDF, but declined to enhance its equity participation in the airport project.

BIAL had stuck to its stand that revenue from non-aeronautical charges could not be a yardstick to fix UDF. It had cited its concession agreement with the State Government, an issue strongly contested by AERA.

However, in a letter dated July 30 to AERA, the Airport shareholders indicated its agreement for a 30 per cent cross subsidisation on a Hybrid-Till model, to ensure a workable solution.

Under this model, the UDF is calculated by taking into account all the aeronautical and 30 per cent of the non-aeronautical revenue. Incidentally, this model is adopted by Delhi and Mumbai airports.

But BIAL insisted that even in this model, funds requirement of BIAL for further expansion of the airport and debt repayment needs a special consideration. It was reportedly in this context that the Airport shareholders, GVK (43 per cent), Siemens (26 per cent), Zurich Airport (5 per cent), Airports Authority of India (13 per cent) and Karnataka State Industrial and Infrastructure Development Corporation (13 per cent) had approached the State Government to raise Rs 150 crore equity participation from the state government.

In its letter to AERA, BIAL had also said that it was in the process of submitting fresh calculations. When contacted by Deccan Herald, BIAL, however, declined to divulge details on its revised UDF figures stating that tariff determination was a subject matter of the Authority.

(Published 19 September 2013, 21:17 IST)

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