No ADF at Delhi,Mumbai from Jan 1,2013

The civil aviation ministry Tuesday asked operators of the airports at Delhi and Mumbai to stop levying the Airport Development Fee (ADF) from next year.

Written by ENS Economic Bureau | New Delhi | Published: October 16, 2012 10:04 pm

The civil aviation ministry Tuesday asked operators of the airports at Delhi and Mumbai to stop levying the Airport Development Fee (ADF) from next year,and directed the state-run Airports Authority of India (AAI) to infuse more equity in the joint venture firms operating the country’s two largest airports.

Civil Aviation Minister Ajit Singh directed Dial International Airport Ltd (DIAL) and Mumbai International Airport Ltd (MIAL) to submit proposals to the Airports Economic Regulatory Authority (AERA) on stopping ADF from January 1,2013,an official spokesperson said.

ADF — a form of viability gap funding to bridge the difference in the actual and estimated cost of construction for the private sector airport developers — is currently charged at the rate of Rs 200 per domestic passenger and Rs 1,300 per international passenger at Delhi airport,Rs 100 and Rs 600 respectively at Mumbai.

The ministry had last week directed AAI to not charge ADF at the Chennai and Kolkata airports which are currently being modernised.

The ministry has asked AAI to infuse money in DIAL and MIAL against its 26 per cent in both companies. “AAI,in its board meeting on October 19,2012,is likely to clear infusion of equity of approximately Rs 288 crore in case of MIAL and equity share of approximately Rs 102 crore in DIAL,” a senior ministry official said.

“AAI has said it is in a position to infuse equity at any time. If that happens,there would not be any need to charge ADF and burden passengers,” the official said. If ADF is abolished from January 1,the expected financing gap for MIAL would be about Rs 4,200 crore and for DIAL about Rs 1,175 crore,which the operators will have to bridge by infusions in their share of equity.

In a statement,DIAL said it would,“in consultation with its partners,at the appropriate time,… take the views of its lenders and equity partners and analyse its financial structure,including the ability to raise further debt and equity,and also the consequential  increased impact on the aeronautical tariffs and respond appropriately to AERA”.

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