Bangalore airport to earn Rs 200 crore from passenger levy
BS Reporter / New Delhi Jan 11, 2009, 00:22 IST
The Bangalore Airport would earn an additional revenue of around Rs 150 crore-Rs 200 crore per annum, with the government approving imposition of a levy of Rs 260 as user development fees (UDF) from each domestic passenger. The airport charges already being levied from international passengers is Rs 1,070.
According to sources, the airport handled 10.5 million passengers in 2008, compared with an expected over 11 million. Aviation industry sources have said that the Delhi and Mumbai airports could be next in line to start charging airport development fees worth Rs 200-300 on domestic passengers and Rs 1,000 from international passengers.
A proposal to this effect is under consideration of the ministry of civil aviation and is expected to be cleared soon.
Last year, the greenfield Hyderabad airport was allowed to levy Rs 375 as UDF from domestic passengers and Rs 1,000 from international passengers. Bengaluru International Airport Limited (BIAL), the Siemens-led consortium that is operating the Bangalore airport, had initially proposed Rs 675 from domestic passengers and Rs 995 from international passengers, which was rejected by the civil aviation ministry.
The airport has a capacity to handle 12 million passengers annually. The project cost of the airport is Rs 2,273 crore. According to the Airports Council International’s world traffic report 2007, Bangalore was the fourth fastest-growing airport in the country, growing at a rate of 33.8 per cent.
Both Delhi and Mumbai airport have expressed a shortfall of around Rs 2,000 crore each in the development of projects worth Rs 8,890 crore and Rs 9,800 crore, respectively, to the civil aviation ministry and have asked for the gap to be filled by UDF.
For both airports, the gap in the equity structure due to various reasons, including a bleak response to the the real estate project, has dissuaded banks to disburse them further loans to fund the project.
“The Delhi airport does not even have enough working capital to last them long. The ministry has to find a way so that there is solution to the paucity of funds. We are looking at various options including the levy of an airport charge,” said a civil aviation ministry official.
I think that BS has not done its homework well. If I have read the news reports in other reports correctly, the UDF is to be levied only on DOMESTIC DEPARTING passengers. So out of the presumed 10 million passengers using BIAL, only 50% will be departing passengers (i.e. 5 million) and out of them, around 80% will be domestic passengers. So a UDF of Rs.225 approx (on net basis after deducting Rs.35 towards taxes & other charges) will add only Rs.80-90 crores to the kitty. assumptions being true.
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