Airport concession fee planned

The civil aviation ministry is planning to ask for an annual concession fee from the private operators bidding for the Delhi and Mumbai airports.

Besides, the ministry might ask the promoters to pay 4 per cent of the revenue collected to the Airports Authority of India, senior ministry officials said.

However, the final decision on the financial parameters and the tariff regime will be taken by an empowered committee set up by the Cabinet.

The ministry was also planning to adopt the joint venture route for 20 airports across the country, including Kolkata and Chennai, the sources said.

The annual fee and a revenue share, the ministry feels, will help the AAI to tide over any financial difficulty it may face resulting from the privatisation of the two metro airports as these two together account for nearly 60 per cent of the AAI's profits.

The AAI uses them to cross-subsidise other loss making airports across the country.

The ministry has plans to demand a share of the entire revenue and not just traffic revenue alone. As of now, non-traffic revenue accounts for only 35 per cent of the total revenue of the AAI.

Resultantly, the private operators would have to put in a sizable investment to generate non-traffic revenue.

The sources said the ministry would set up a Civil Aviation Economic Regulatory Authority to oversee the tariff structure.

The private operators will be allowed to enhance tariffs in accordance with International Air Transport Association norms.

The cabinet cleared the proposal allowing private Indian and foreign players to pick up 74 per cent stake in joint venture companies for the Mumbai and Delhi airports.

The ministry will appoint a global technical advisor to assist in the selection of the bidder.