From January, no airport development fee for Delhi, Mumbai passengers

If Aviation Minister Ajit Singh has his way, air travellers will be a happy lot next year.

The government has decided to abolish the airport development fee charged in Delhi and Mumbai. The Civil Aviation Ministry has said that the fee will not apply from January 1.

Domestic fliers pay Rs. 200 at Delhi, and Rs. 100 at Mumbai. International passengers are charged Rs. 1300 in Delhi and Rs. 600 in Mumbai.

However, GMR, which leads the consortium that runs the Delhi airport, has been non-committal about whether the minister's order will be implemented. GMR has said that the aviation ministry's order needs to be upheld by the Airport Economic Regulatory Authority (AERA) for it to be imposed.

The civil aviation ministry's order says that the gap in funds can be met by increasing the equity of Airport Authority of India and by raising loans. GMR, however, has remained non-committal on raising fresh loans and has also indicated that the abolishment of the development charge at airports will lead to an increase in the cost of aeronautical services.

The Mumbai International Airport Limited (MIAL), however, took a more cautious approach, saying it will respond only after appropriate discussions. "We will study the current development, assess its impact on our project and means of finance and after consulting with our Board of directors, partners and lenders, will respond to the relevant authorities, in due course of time," MIAL said in a statement today.

In August, the national auditor had attacked the civil aviation ministry for allowing the Delhi airport consortium to charge passengers a development fee to help raise funds for the project. The auditor said this was not part of the original contract. The CAG says Delhi International Airport Limited (DIAL) will get an undue benefit of over Rs. 3,400 crore from the development fee.

The Mumbai and Delhi airports had started to levy an airport development fee because the state-run Airports Authority of India failed to infuse additional equity to meet development costs at the airports, where it is an operating partner with private players.  

Civil aviation minister Ajit Singh has asked the Airports Authority of India to raise approximately Rs. 288 crore for the Mumbai airport and Rs. 102 crore for Delhi,  against its 26 per cent share in both joint ventures.

(With inputs from agencies)