Tariffs at Kolkata, Chennai airports may be determined before awarding projects

Aug 23 2013, 08:31 IST
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SummaryAirport Economic Regulatory Authority has mandate to determine aeronautical and non-aeronautical charges at all major airports.

To ensure that the proposed privatisation of Kolkata and Chennai airports do not result in higher charges for passengers, the amounts to be levied at these airports following their privatisation are likely to be determined prior to the award of these airport projects.

There is already a lot of criticism around privatisation of airports due to very high charges being levied to passengers for using the newly-built private airports. The charges at the airports to be awarded in the country can be made reasonable by fixing these charges prior to their award and linking their increase to the wholesale price index, said a source in the Planning Commission.

The source added that the model request for proposal (RFP) and request for qualification (RFQ) documents for Public-Private Partnership projects allows the government to award projects by predetermining charges and fees.

The RFP and RFQ for awarding Kolkata and Chennai airports should be on the lines of model documents already in place, the source added.

The Airports Authority of India (AAI) involved in preparing documents for the award of Kolkata and Chennai airports, is, however, opposed to the idea.

It is not possible to award airport projects by determining the charges prior to the award and we have made our opposition clear to the authorities concerned. Also, there is no need to predetermine when we have a regulator in place to determine charges, said a senior AAI official.

The aviation sector has a regulator in the Airport Economic Regulatory Authority that has the mandate to determine aeronautical and non-aeronautical charges at all major airports in the country. Any airport in the country that handles 1.5 million or more passengers annually is termed as a major airport.

Deciding tariffs prior to the award of airport projects is different from the one followed during the award of Delhi and Mumbai airports.

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