With the government deciding to abolish airport development fee (ADF) at Delhi and Mumbai airports from January 1, Airports Authority of India (AAI) has written to the economic regulator AERA, saying it would infuse more equity to bridge the funding gap.
While scrapping ADF which was levied on passengers to meet cash flow requirements before completion of an airport upgrade project, Civil Aviation Ministry had asked AAI to infuse additional equity of Rs. 288 crore in Mumbai International Airport Ltd and Rs. 102 crore in Delhi International Airport Ltd, against its 26 per cent share in the two joint ventures.
Currently, ADF is charged at the rate of Rs. 200 per domestic and Rs. 1,300 per international passenger at Delhi Airport and Rs. 100 and Rs. 600 respectively at Mumbai, which would not be imposed from January one.
Official sources said AAI has written to AERA saying it was willing to infuse additional equity into MIAL and DIAL to enable the scrapping of ADF.
Industry sources have pointed out that scrapping of ADF could result in a hike in the user development fee (UDF), which is charged for using a completed facility.
However, official sources said the balance in the funding gap would have to be met by the airport operators through infusion of their share of equity.
Once ADF is abolished, this gap for MIAL is likely to be about Rs. 4,200 crore and for DIAL about Rs. 1,175 crore.
AAI has also been asked not to impose ADF at Kolkata and Chennai airports, which it is developing on its own at a cost of Rs. 2,325 crore and Rs. 2,015 crore respectively.
AAI had earlier sought government’s permission to raise resources through the issuance of infrastructure bonds to modernise non-metro airports, but was not allowed to do so.
AERA, which is in the process of determining ADF and aeronautical tariff for Mumbai airport, had asked AAI as to what extent could it inject additional equity into the project. It would now fix only UDF and other tariffs like landing, parking and navigation charges.
