New Delhi: This 'cost-plus model' followed by the Airports Economic Regulatory Authority of India (AERA) is 'clearly flawed', says Gajendra Haldea, Advisor on Infrastructure to Deputy Chairman of the Planning Commission Montek Singh Ahluwalia.
"AERA's determination of tariff is directly proportionate to the investment, which means higher investment will give the private entity more profits, while all the costs will be borne by passengers and airlines through higher tariffs. This model is clearly flawed," Haldea said in an interview to The Indian Express.
Replying to a question on a proposal to link charges at airports with wholesale price index, he said that tariff setting by AERA has led to many questions. "For example, at the time of award, Delhi airport was expected to be upgraded at an investment of about Rs 4,000 crore.
13/12/13 Mihir Mishra/Indian Express
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"AERA's determination of tariff is directly proportionate to the investment, which means higher investment will give the private entity more profits, while all the costs will be borne by passengers and airlines through higher tariffs. This model is clearly flawed," Haldea said in an interview to The Indian Express.
Replying to a question on a proposal to link charges at airports with wholesale price index, he said that tariff setting by AERA has led to many questions. "For example, at the time of award, Delhi airport was expected to be upgraded at an investment of about Rs 4,000 crore.
13/12/13 Mihir Mishra/Indian Express
