New Delhi: The
government Tuesday said it will scrap charging airport development
fees (ADF) meant to cover the funding gap for the development of
Mumbai and New Delhi airport from Jan 1, 2013.
Currently, the ADF charges are Rs.200 per domestic passenger and
Rs.1,300 per international passenger at Delhi airport, and Rs.100
per domestic passenger and Rs.600 per international passenger at
These charges are part of an agreement signed between the two
private players, who manage the New Delhi and Mumbai airports, and
the government for the modernisation of the aeronautical
infrastructure at the two cities.
The IGI airport operator, Delhi International Airport Limited, had
submitted the total cost of modernising the IGI airport at
Rs.12,857 crore against the original cost of Rs.8,957 crore it
gave to the civil aviation ministry in 2009.
On April 24, the Airport Economic Regulatory Authority (AERA)
allowed an escalation of 345 percent in aeronautical charges which
allows the operator to collect Rs.200 from departing domestic and
Rs.1,300 from departing international passengers. The charges
became applicable in May.
According to the Civil Aviation Ministry, the proposal will be
carried out by infusion of fresh funds from the Airports Authority
of India (AAI) which is a part owner of the Delhi and Mumbai
"Civil Aviation Minister Ajit Singh has directed AAI to infuse
more equity in Mumbai and Delhi airports and accordingly submit
its proposals to AERA," the ministry said in a statement.
However, the proposal comes with a rider that the ADF will stand
abolished only if funding gaps are met with equity infusion and
raising of loans by the airport operators.
If ADF is abolished from Jan 1, 2013, the finance gap of Rs.4,200
crore is expected in case of Mumbai and Rs.1,175 crore in case of
AAI has been directed to infuse additional equity of Rs.288 crore
in case of Mumbai airport against its 26 percent share in equity
"Similarly in case of Delhi to fill the balance in financing gap,
AAI will contribute equity share of Rs.102 crore," the statement
The balance in financing gap of the project will have be met by
the airport operator through infusion of their share of equity.
Earlier, the ministry had directed AAI not to levy ADF at the
Chennai and Kolkata airports. AAI had submitted proposals to AERA
for levying ADF of Rs.300 per embarking domestic passenger and
Rs.1,000 per embarking international passenger at Chennai and
The modernization and expansion of Kolkata and Chennai airports is
currently underway, on expenditure budgets of Rs.2,325 crore and
Rs.2,015 crore respectively.