Wednesday, August 29, 2018

India Ministry of Civil Aviation proposes 'reasonable cap' on aeronautical yield for new airports

India's Ministry of Civil Aviation (MoCA) released (28-Aug-2018) the following additional details about its proposed transaction model for new airports:

New airport concession contracts to based on develop, build, finance, operate and transfer model;
New airport concession contract period extended to 40 years;
Concession fee of INR per passenger to replace share of gross revenue as the bid parameter for new airport concession contract tenders. Rather than awarding contracts to the bidder offering the highest revenue share, "The bidder quoting the highest Concession Fee will be declared the highest ranked bidder";
Moratorium on payment of concession fee for the first three years of operation of new airports;
Cost plus model of determining airport tariffs based on capital expenditure throughout the concession period to be replaced by pre determined tariff model based on "maximum blended aeronautical yield (MBAY) in terms of INR per passenger";
MBAY of INR400 (USD5.7) per passenger for all new airports proposed for FY2018/19;
Total aeronautical revenue p/a allowable to the concessionaire is MBAY multiplied by the number of airport passengers p/a.
29/08/18 CAPA
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