BENGALURU: A majority of stakeholders who provided their feedback on the massive cut proposed by Airports Economic Regulatory of India (AERA) in User Development Fee (UDF) for departing passengers collected at KIA have backed it solidly. However, the state government, BIAL, majority stakeholder Fairfax Private Holdings Ltd and Association of Private Airport Operators, have opposed the move.
AERA on Friday made public all responses it received on its website for the UDF proposed on May 29, for the control period 2016-2021 (see box).
The state government has batted for the continuation of the existing tariff bearing in mind the airport’s expansion plans. In the consultation paper submitted by Sandeep Dave, Additional Chief Secretary, State Infrastructure Development department, said AERA’s stand on tariff determination “might have an adverse impact on the timely completion of the expansion projects of BIAL”.It states the excess revenues collected as UDF can be used for the next control period (2021-2026) when higher tariffs on passengers are expected due to higher capitalisation.
BIAL pointed out that Terminal II will be ready for March 2021, the Eastern Tunnel entry to the airport was being planned and a 220/66 KV substation was being set up. It prayed for the continuation of the existing UDF, “so as to have adequate cash flow support to undertake envisaged investments”.
In his consultation paper submitted as a resident of Bengaluru, urban transportation expert, Sanjeev Dyamannavar called for bringing down the user fee to zero. New UDF charges for the airport were due since April 2016. “KIA has collected excess fee for last 27 months. We request AERA to bring the UDF requirement to nil for the balance Control Period,” he said. Dyamannavar told TNIE that the UDF was zero in Mumbai and New Delhi airports.
Dyammanavar also pointed out to the extension of the interest-free loan of `333.50 crore by the state government by an additional 10 years recently. “Neither the State, nor the BIAL have asked AERA in their submissions to provide `1,000 crore for the Metro airport connectivity line as was proposed long ago,” he pointed out.
Revathy Ashok, Chief Executive Officer of Bangalore Political Action Committee (BPAC) said that the figures for the financial year 2016-2017 reveal that the airport has made substantial profit. “Excessive UDF charges have fully contributed to BIAL’s higher profit margins,” her paper stated. With passengers increasing annually, BIAL would make super profits while hapless passengers will bear the brunt, the paper added.