New Delhi: The ministry of civil aviation is looking at awarding airport management contracts at Chennai, Kolkata, Lucknow, Guwahati, Jaipur and Ahmedabad to private operators at pre-determined rates rather than on a cost-plus basis to safeguard passengers against high user charges post award of the projects.
A senior official at the ministrysaid, "We are working out the formula for determining the revenue-share agreement between the private operator and the Airports Authority of India. But what we broadly want to do is to predetermine rates so that there is some amount of certainty in the charges which would be levied on passengers.
Airport operators would also stand incentivized to increase efficiency when there is a specified limit." The new model being considered is in line with the recommendation of the PlanCommission to determine landing and parking charges at the six airports identified for privatisation prior to the award of the project and of linking the increase in tariff to the wholesale price index (WPI).
Earlier in December last year, the ministry had raised questions saying that the Plan Comm's suggestion is likely to lead to an upward bias as charges would increase even after the operator recovers his investment. Under the formula being considered now, landing and parking charges at airports would decrease by around two per cent annually and thereafter the tariffs be indexed in line with the inflation rate.
27/02/14 Business Standard
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A senior official at the ministrysaid, "We are working out the formula for determining the revenue-share agreement between the private operator and the Airports Authority of India. But what we broadly want to do is to predetermine rates so that there is some amount of certainty in the charges which would be levied on passengers.
Airport operators would also stand incentivized to increase efficiency when there is a specified limit." The new model being considered is in line with the recommendation of the PlanCommission to determine landing and parking charges at the six airports identified for privatisation prior to the award of the project and of linking the increase in tariff to the wholesale price index (WPI).
Earlier in December last year, the ministry had raised questions saying that the Plan Comm's suggestion is likely to lead to an upward bias as charges would increase even after the operator recovers his investment. Under the formula being considered now, landing and parking charges at airports would decrease by around two per cent annually and thereafter the tariffs be indexed in line with the inflation rate.
27/02/14 Business Standard
