Expansion plan procedure to be made more stringent for airport operators

New Delhi: Operators of large airports—those with an annual handling capacity of at least 1.5 million passengers—will need to convince the regulator, airlines and consumer forums of the merits of expansion plans and get their project costs greenlighted by the stakeholders before they are allowed to scale up the facilities.
The move by the Airports Economic Regulatory Authority, or Aera, is an attempt to curb soaring costs associated with open-ended projects such as the modernization of the Mumbai and New Delhi airports that have entailed airlines and passengers paying more.
“Consultation for any investment is a major precondition in our guidelines,” Aera chairman Yashwant Bhave said in an interview.
“They have to consult (with stakeholders) if the capex (capital expenditure) is all right, what process has been followed for traffic forecast etc.,” if airport user charges are to be decided on the basis of their investment in expansion, he said.
The move comes on the heels of Delhi International Airport (Pvt.) Ltd, or DIAL, last week setting the final cost of modernizing the Indira Gandhi International Airport at Rs12,700 crore, a 42% increase over the Rs8,975 crore estimated earlier, clearing the way for raising existing charges and possibly levying new ones on passengers.
The cost estimated for modernizing the Mumbai airport has risen to Rs9,802 crore from Rs5,826 crore.
Airlines and consumer forums have in the past protested airport charges levied to allow the operators to recover investments. The charges are based partly on the project cost.
“The positive side is (that) what will happen from now is that decisions will be circulated for views and the views will be considered before a final decision, compared to the earlier scenario where the aviation ministry took a call, so the process is more transparent,” said a senior domestic airline official who asked not to be named.
30/03/10 Tarun Shukla/Live Mint

To Read the News in full at Source, Click the Headline

Categories: Airports Mar 2010