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| Fliers to pay more tax at Mumbai airport |
| Mihir Mishra / New Delhi Feb 14, 2012, 00:10 IST |
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Flying out of Mumbai airport is set to become more expensive. The airport operator is in the process of acquiring 16 acres of nearby land, for Rs 250 crore, with the cost to be added to the bill for expansion. Any such rise in project cost means a rise in the Airport Development Fee (ADF) charge on passengers.
The cost of acquisition will be paid by the airport operator, Mumbai International Airport Ltd (MIAL), and added in the total project cost for modernising/expanding it.
“We have sent a proposal to the state government to acquire the land. This is between two operational areas of the airport and the plan is to use it for aircraft parking,” said a senior Airports Authority of India (AAI) official, who did not want to be identified. He said AAI would acquire it and then transfer the land to the airport operator, Mumbai International Airport Ltd (MIAL), but the cost would be borne by the latter.
MIAL charges Rs 600 and Rs 100 from each international and domestic passenger, respectively. It has been empowered to charge this between 2009 and 2013. With the increased cost, the fee is set to increase, to recover the increased project cost. A MIAL spokesperson did not reply to the specific query on the land acquisition plans.
MIAL is a consortium led by Hyderabad-based GVK Industries, selected to operate and develop Mumbai airport. GVK owns 50.5 per cent stake, followed by AAI with 26 per cent, 13.5 per cent with BSDM and ACSA Global with 10 per cent. The cost of modernising Mumbai airport was pegged at Rs 5,826 crore when the project was awarded in 2006. The estimated cost was later increased to Rs 9,800 crore. Time and cost overruns have reportedly increased the project cost further, to Rs 12,300 crore.
Delhi and Mumbai were the first two AAI airports given to the private sector for modernisation and upgrade. Delhi airport, being operated and upgraded by a GMR-led consortium, also registered an increase in total project cost from Rs 8,975 crore to Rs 12,700 crore. The airport charges an ADF of Rs 200 on every domestic passenger and Rs 1,300 on every international passenger, to recover the increased cost.
High investments in the airports have made these expensive, leading to some airlines pulling out of India. AirAsia X has pulled out of Delhi and Mumbai airports, and AirAsia had pulled out of Hyderabad airport recently.
Recently, the Airports Economic Regulatory Authority has proposed a 340 per cent increase in landing and parking charges at Delhi airport. Mumbai airport has also asked for a 500 per cent increase in landing and parking charges.
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