Photo: Hindustan Times
Photo: Hindustan Times

Airport regulator defers tariff increase for Mumbai Airport

Airport regulator has extended the current tariff rate of Mumbai Airport beyond 31 August

GVK Group-controlled Mumbai International Airport Ltd (Mial) will have to wait longer to increase tariff at the Chhatrapati Shivaji International Airport as the airport regulator has extended the current tariff rate beyond 31 August.

India’s airports regulator—the Airports Economic Regulatory Authority of India (Aera)—on Tuesday said the tariff approved by the authority in a 15 January 2013 order shall continue up to 30 November 2015, or until the final determination of the tariffs for the second control period.

The second control period for MIAL is 2014-2019, which means the tariff revision is already late by two years now.

“The revenue so collected by the airport operator (Mial) during such period (2014-2019) be adjusted from the aggregate revenue requirement for the second control period starting with effect 1 April 2014," Aera said in its order issued on 24 August.

The order was posted on its website on Tuesday.

The continuation of the existing tariff beyond 31 August essentially means that Aera has been unable to come out with its consultation paper on tariff revision for Mumbai airport and is much behind schedule. Aera has to prepare a consultation paper and invite feedback from the stakeholders, including Mial, before finalizing the revised tariff.

The Chhatrapati Shivaji International Airport had got approval for a 164% increase in revenue from aeronautical charges last time for the first control period against a demand for an increase of 881%.

A Mial spokesperson declined to comment.

Aera did not disclose when will it come out with the discussion paper on MIAL’s tariff revision.

A senior executive at MIAL requesting anonymity said the airport is expecting an upward revision of tariff from Aera for the second control period.

The extension of the existing tariff at Mial comes at a time when GVK Group is planning to hit the capital market with an initial public offer (IPO) for its airports business.

The group will utilize the proceeds to retire debt worth around 3,000 crore. GVK plans to club all its Indian airport units under GVK Airport Developers before listing. An IPO will make GVK Airport Developers Pvt. Ltd the first airport developer to be publicly traded.

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