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Rediff News  All News  » Business » Kerala opposes development fee at Trivandrum Airport

Kerala opposes development fee at Trivandrum Airport

July 12, 2010 11:53 IST

KeralaThe Kerala government has opposed the proposal of the Airports Authority of India to levy User Development Fee on international passengers at the Trivandrum International Airport in Thiruvananthapuram.

"The letter questions our move by asking us what is the need to levy UDF on international passengers when we got the land (for the airport) at a much cheaper rate.

"Also, this will burden the passengers a lot," said a senior Airports Authority of India official who did not want to be identified.

"We have also replied by saying that the investment made is to be recovered and the investment does not include the value of the land," added the official.

AAI has got approval from Airport Economic Regulatory Authority to charge Rs 755 per departing international passenger for a period of 10 years.

The approval for any charges to be levied at major airports (that handle 1.5 million and more passengers annually) comes from AERA and that for minor airports comes from the civil aviation ministry.

"Considering the political equations in Kerala, we decided not to charge UDF only from international passengers and not domestic passengers," said the official.

The airport handles over 2 million passengers a year and around 76 per cent of them are international. The state-owned airport operator has built a new international terminal at the Thiruvananthapuram airport at a cost of Rs 289.60 crore (Rs 2.89 billion).

The project was approved in 2006 at a cost of Rs 245.58 crore (Rs 2.45 billion).

AAI has been charging UDF at Jaipur and Ahmedabad airports and plans to charge it at Udaipur, Amritsar, Mangalore, Varanasi, Visakhapatnam and Trichy airports.

The airport authority expects to increase its revenue by Rs 100 crore (Rs 1 billion) through development fee.

As of now, airports at Delhi, Mumbai, Hyderabad and Bangalore, where private players are major stakeholders and AAI part of the consortium, charge such development fees. Delhi and Mumbai charge Airport Development Fee, whereas UDF is charged at Hyderabad and Bangalore.

ADF is charged to bridge the funding deficit, while building an airport and UDF helps bridge the revenue deficit during operations.

AAI has completed development work at 35 non-metro airports in the country. It is also taking up the city-side development of Kolkata, Visakhapatnam, Bhubaneswar, Lucknow, Indore, Ahmedabad, Amritsar, Guwahati and Jaipur airports through public-private partnerships.

Mihir Mishra in New Delhi