Single, dual-till issues to dominate Aera hearing

Mumbai: Single- and dual-till issues to determine airport tariffs will dominate the hearing on March 16 of the discussion paper on the regulatory process being framed by the Airports Economic Regulatory Authority of India (Aera).
The single-till norm could reduce aeronautical charges (a component of the overall airport tariffs) as compared to dual-till in which the surplus from non-aeronautical revenues subsidise aeronautical activities.
The tariff regulator says one of its mandate under the Aera Act is to ensure financial viability of the airports.
Airport developers, however, are expected to make a pitch for dual-till norm, as experts say, they are keen on keeping the large non-aeronautical revenues outside of regulatory process for their benefit.
Aera Chairman Y S Bhave told Business Standard: “The fair rate of return as a financial anchor and interest of passengers and cargo as physical anchors are the underlying factors in the proposed regulatory framework and philosophy. One of the parameters to determine tariff is the quality of service for passengers consistent with the charges. The accuracy of traffic forecast is another.”
The consultation paper mentions 16 per cent rate on investment for airports as indicative and for discussion. This has also been accepted by the Planning Commission as well as the Tariff Authority of Major Ports.
15/03/10 Sanjay Jog/Business Standard

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Categories: Airports Mar 2010