The Centre has refused to allow the Delhi airport to levy an airport development fee (ADF) for the development of an elevated air train corridor which is to connect its three terminals. The project is expected to cost Rs 3500 crore.
According to an ET report, the Ministry of Civil Aviation, alternatively, asked the GMR Group-operated Delhi International Airport Ltd (DIAL) to plan another way of funding and levy a user development fee (UDF) after the train is operational. DIAL, as per sources cited in ET, are planning to raise external funding by debt or equity.
The corridor aims to reduce transfer times for passengers who now have to depend on other modes like buses and taxis. The project is an important component of the Centre’s plans to develop the capital city into a hub, commensurate with the airports in Dubai and Singapore.
While ADF is a pre-funding mechanism for constructing infrastructure projects in airports, allowing operators to charge passengers to cover the cost of an ongoing project, UDF is levied later when the airport is unable to generate enough returns on investments. Moreover, ADF faced opposition by the Airports Authority of India (AAI) as it is a capital receipt, the share of which does not come to it. UDF, a part of total revenue, has to be shared with the AAI under the privatisation agreement of 2006.
ADF has also been criticised in the past by the Supreme Court and the Comptroller and Auditor General.