Govt rejects Delhi Airport's request for development fee

08 Jan 2024 CW Team

The government has refused to grant permission to Delhi airport for imposing an airport development fee (ADF) to fund a Rs 35 billion elevated air train corridor connecting its three terminals. Instead, the Ministry of Civil Aviation has instructed the GMR Group-operated Delhi International Airport Ltd (DIAL) to explore alternative funding methods and later impose a user development fee (UDF) once the train becomes operational.

DIAL is currently seeking external funding, either through debt or equity, according to a senior executive of the private airport. The air train project aims to link the three airport terminals, reducing transfer times for passengers who currently rely on buses and taxis. This initiative is crucial for the government's aspiration to position Delhi as a hub comparable to airports in Dubai and Singapore.

The Airports Authority of India (AAI) opposed the ADF, citing it as a capital receipt, and discussions with DIAL and AAI have not been commented on. In contrast, the UDF will be part of the total revenue, with 46% shared with the AAI under the privatisation agreement of 2006. The decision not to allow the ADF levy was influenced by past criticism from the Supreme Court and the Comptroller and Auditor General (CAG). The government officials emphasised caution, citing previous controversies over ADF for runway and terminal construction.

DIAL will now explore other funding options, and one possibility is to increase the number of stops from four to six to boost paying passenger numbers. The air train will remain free for transit passengers. The original plan was for four stops at T3, cargo terminal, Aerocity, and T1, with a transit time of 8-10 minutes. However, the project may be adjusted to include two more stops at Aerocity for increased revenue.

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