Centre may tweak airport tariff rules

Centre may tweak airport tariff rules

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News:

  1. In a bid to make the upcoming greenfield airport projects attractive for global players, the Civil Aviation Ministry may amend its regulatory law to fix airport charges in advance
  2. Ministry is examining how to amend the Airports Economic Regulatory Authority of India (AERA) Act 2008

What this would mean?

  1. If aeronautical charges are captured in the bid document of the greenfield airport project itself, there would not be any need for fresh determination of such charges by the regulator (AERA) 
  2. In addition to land, service standards and airport design, the bidding document for greenfield airport projects will specify the airport tariff which will be indexed “appropriately” to factor in inflation, foreign exchange and interest rates

Importance of the move:

  1. The move comes at a time when the Centre has given its in-principle approval to build a second airport for the National Capital Region (NCR) in Greater Noida’s Jewar region in Uttar Pradesh

Airports Economic Regulatory Authority

  1. AERA is a statutory body established in 2009 to determine tariff in respect of airport services provided at major airports across the country
  2. The AERA revises tariff every five years, known as a control period, considering the investment and expenditure incurred by the airport operator
  3. The AERA, while determining tariff, keeps into account capital expenditure, service provided, cost of improving efficiency, economic and viable operations of major airports, revenue received from services such as food and beverages, duty-free shops, advertising and car parking, among others

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