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Delay in fixing tariff led to DIAL’s woes: Ajit Singh

“AERA should have increased the tariff in 2009. Three years have gone by and no tariff was increased,” Singh said on Thursday.

Written by ENS Economic Bureau | New Delhi | Published: April 13, 2012 1:12 am

Civil Aviation Minister Ajit Singh today said that the delay in fixation of tariffs by the Airport Economic Regulatory Authority (AERA) has led to financial stress for the Delhi International Airport Limited (DIAL).

“AERA should have increased the tariff in 2009. Three years have gone by and no tariff was increased,” Singh said on Thursday.

DIAL had claimed on Wednesday that it was facing acute financial stress and if its proposed hike does not come through,it may have to shut down its operations in three-four months. Singh said DIAL’s demand for higher tariff was owing to their non-revision for the last ten years,barring one nominal increase of 10 per cent.

DIAL through its submission to the AERA had sought over 700 per cent hike in aeronatucial charges,which were opposed by airlines already reeling under cash crunch and likely to post heavy losses.

AERA,through its extensive stakeholders consultations’ early this year,has proposed a 300 per cent hike. DIAL has opposed the hike and wants the Authority to allow it to charge Rs 400-800 User Development Fee from all passengers,in addition to the Development Fee being levied by it.

Singh said Air India and Kingfisher’s inability to pay has also led to grim financial situation of the airport company. He said today’s decision on Rs 30,000 bailout for the cash-strapped national carrier may also bring relief to DIAL.

GMR CFO (airports) Siddharth Kapur had earlier said that nearly Rs 500 crore of combined dues of Air India and Kingfisher have also been a major setback to its smooth operations.

“Kingfisher has started paying airport charges amounting to about 40 lakh a day regularly. We may ask them to increase payments by 15-20 lakh a day soon to recover pending dues,” said Kapur. DIAL is likely to post losses of Rs 900 crore this financial year,previously they lost nearly Rs 450 crore.

The global body of airlines,IATA,has said that the tariff sought by DIAL would make Delhi one of the most expensive airports globally.

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