Govt. allows DIAL to charge development fee from passengers

New Delhi, Feb.9, (ANI): The Government has conditionally approved the levy of a Development Fee (DF) by the Delhi International Airport Limited (DIAL) at Rs. 1,300 per departing international passenger and Rs. 200 per departing domestic passenger with effect from March 1, 2009.

The DF, which is being levied purely on an adhoc basis, is inclusive of all applicable taxes and is for a period of 36 months only.

This approval shall be reviewed upon many facts, like DIAL will have to submit its final project cost estimates within 6 months of the commencement of the levy of DF and thereafter at such intervals as the Regulator/Central Government may decide.

The project cost so submitted, including amount of contingencies, and their utilization shall be audited by an independent technical auditor to be appointed by Airport Authority of India (AAI) or as the Regulator/Government may decide.

DIAL will undertake a review of the bidding process in respect of the hospitality district.

The approval is subjected to the many conditions like, a procedure to monitor mechanism shall be followed, in which DF receipts would be deposited in a separate Escrow Account.

Modalities of the Escrow Account may be decided by DIAL, with the approval of the AAI, at-least one week before the commencement of levy.

AAI and the Central Government would have supervening powers in respect of Escrow Account to ensure that all receipts are properly accounted for and are utilized only for permitted purposes. These powers may include stoppage of withdrawal by DIAL.

Presently, other capital receipts like equity and debt funds are channelized through another Escrow Account of DIAL as per Operation Management and Development Agreement (OMDA) requirements.

The Independent Auditor appointed by Airports Authority of India (AAI), presently verifies only the revenue as defined in Article 1.1. of Operation Management and Development Agreement (OMDA), and not the receipts of capital nature and utilization thereof. As a condition of this approval, DIAL would be required to subject such capital receipts and expenditure also to AAI supervision.

The compliance in respect of the above issues will be furnished by AAI and DIAL to the Central Government on event basis as well as on a periodical monthly basis.

DIAL should also report the collection and usage of DF on a monthly basis to Central Government/Regulator through AAI.

At the stage of final determination, Regulator/Central Government will ensure adequate consultation with the users.

The amount collected through DF would not in any case exceed the ceiling of Rs. 1,827 crores. The ceiling amount would be exclusive of taxes, if any.

In case the cost escalation is less than the retained amount, the ceiling amount of Rs. 1,827 crores would be reduced by an amount which is equal to the difference between the retained amount of Rs. 1,250 crores and the amount representing project cost escalation beyond Rs. 8,975 crores.

The Delhi International Airport Private Limited (DIAL) is undertaking modernization, development and up gradation of IGI Airport, New Delhi as per the approved Master Plan.

However, it has now been brought to the notice of the Central Government that DIAL are unable to raise Refundable Security Deposits to the extent anticipated and a substantial short fall is expected.

It has also been stated that the lenders have not agreed to extend any further debt as the existing debt arrangement takes into account all possible revenue streams and have suggested that levy in the nature of capital receipts to leverage any additional debt.

The proposal of DIAL was examined by the Ministry of Civil Aviation in consultation with the Ministry of Law and Airports Authority of India.(ANI)