AERA starts process to set tariffs

Updated: March 7, 2018 3:53 PM

The Airports Economic Regulatory Authority (AERA) has started the consultation process for the contentious tariff control period for Delhi International Airport (DIAL), which is run by the GMR Group.

AERA,  tariff control, Delhi International Airport, GMR Group, AERAAT, UDF, GMR InfrastructureAERA ordered a more than threefold hike in tariff for the 2009-14 control period upsetting the airlines. (Reuters)

Arun Nayal

The Airports Economic Regulatory Authority (AERA) has started the consultation process for the contentious tariff control period for Delhi International Airport (DIAL), which is run by the GMR Group. The third control period will begin from April 2019 and will be valid for five years, that is March 31, 2024. The control period is a five-year duration for which AERA sets user charges at concessionaire airports. The previous two control periods — 2009-14 and 2014-19 — were caught in controversies with airlines and the airport operator challenging its implementation at legal forums.  “The consultation process for DIAL has begun. The capital investment consultant has been appointed and the report is expected in three to four weeks,” a senior government official said.

Under the capital investment consultation, the regulatory asset base of the concessionaire is assessed for the upcoming control period. DIAL, a unit of GMR Infrastructure, is expected to build the fourth runaway, taxiways and carry out expansion of terminals between 2019 and 2024. However, the aeronautical tariff determination exercise will have to wait for now as appeals in the battle between airlines and DIAL are pending before the AERA appellate tribunal.

“The exercise on tariff determination will only begin once we have the view of the appellate tribunal (AERAAT). Several important issues from both control periods will be determined. We are hoping for the orders soon,” the official said. The control period includes levies on parking and landing aircraft, user development fee (UDF), common use terminal equipment charges and fuel throughput charge. “The computation work for these tariffs will be undertaken by a different consultant which is yet to be decided,” the source added.

AERA ordered a more than threefold hike in tariff for the 2009-14 control period upsetting the airlines. The tariff was implemented from May 2012, and was challenged in the appellate tribunal. For 2014-19 control period, the charges went down by up to 90%, forcing DIAL to appeal against the airport regulator’s order. It set UDF of Rs 10 and Rs 45 on outbound domestic and international passengers, respectively, at the Delhi airport while abolishing UDF on passengers arriving at the airport on international and domestic flights.

DIAL levied between Rs 245 and Rs 490 as UDF on each departing passenger and Rs 207 and Rs 415 on each arriving one, on domestic flights as per the first control period. International passengers departing from Delhi airport were charged Rs 565-1,131 and arriving passengers had to shell out Rs 462-933. The second control period could only be implemented in July last year after Supreme Court’s intervention. The top court had asked AERAAT to expedite hearing on both cases. The tribunal has already heard all the parties.

 

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition