The Airports Economic Regulatory Authority, the country’s airports regulator, wants private airport operators, such as the ones running the Delhi, Hyderabad and other airports, to exclude the value of land when calculating tariffs.
Airport operators are often given cheap land as an incentive. Until now, the value of this land was included in calculating tariffs. This makes little sense when the land has not been priced in a land market. These companies then earn more than what they would have had they bought this land by open bidding. At the same time they continue to charge various types of fees from consumers.
Such a move was long overdue as private operators often fail to arrive at realistic project costs and then demand money from consumers in the garb of various fees, making nonsense of the original rationale of letting private players in the sector to improve efficiency.