Even though the Karnataka Cabinet permitted Bangalore International Airport Ltd (BIAL) to hike the user development fee (UDF) on Friday, it is unlikely that it will be implemented any time soon. For, the BIAL’s application to increase the UDF is still pending before the Airports Economic Regulatory Authority (AERA).
Currently, the UDF for domestic passengers is Rs. 231.40 while that for international passengers is Rs. 952.30 that has been fixed since the airport commenced operations in May 2008. In 2012, the airport handled 12 million passengers.
“The matter pertaining to the increase in the UDF can only be decided by the AERA since tariff regulation is a matter that lies with the authority,” sources said, adding that the matter is still under discussion in AERA. The government, which holds 13 per cent share in the airport, permitted the airport operator to increase the UDF after BIAL requested it to increase its equity by Rs. 150 crore to meet the expenditure of airport expansion that is expected to be completed by October 2013. It, however, rejected equity infusion.
While the BIAL in which GVK group holds 43 per cent share, has sought an increase by 238 per cent for domestic and 79 per cent for international departures, the AERA, in a consultation paper released recently, had not agreed to these proposals. The airport operator has made proposals under a couple of options, considering the investments.
