Tariff curbs worry airport developers

The private airport operators — GMR-led Delhi International Airports Ltd and GVK-backed Mumbai International Airports Ltd — are getting jittery over the sector regulator’s approach to fix airport tariff. The Airport Economic Regulatory Authority’s (AERA) wants undermine the state-support agreement between the Airport Authority of India (AAI) and the developers and wants to evaluate the issue afresh. AERA says it is created by an Act of Parliament and sees the agreements as pact between two parties.
The AERA approach would allow it to set new service and operation standards and fix airport charges accordingly. The private airport operators have vehemently opposed the regulator’s intent and have challenged the move in the Appellate Tribunal, apprehending financial losses in future.
The government had in 2006 awarded the concession to operate, manage and develop the Capital’s Indira Gandhi International airport (IGI) to a GMR-led consortium for 30 years with the option of extending it to another 30 years. The Bangalore-headquartered GMR holds the maximum 54% in the joint venture followed by government-controlled AAI. Fraport AG and Eraman Malaysia hold 10% each in the airport company.
“The authority has separately initiated a process to analyse and assess the implications of the principles and mechanics relating to tariff fixation contained in the state-support agreement (SSA). The authority would thereafter separately determine the extent to which the covenants of the SSA would impact the general framework being laid down,” AERA has said in its order in respect to Delhi and Mumbai airports.
25/02/11 Nirbhay Kumar/Financial Express

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

Categories: Airports Feb 2011