Passengers departing from Mumbai airport to continue paying development fees
Airports Economic Regulatory Authority said that the situation will be reviewed again by the end of December 2021, and a decision will be taken based on the report of an independent auditor appointed by the Airports Authority of India
People flying out of Mumbai will have to continue paying development fees for another year. This process was to end on Wednesday, March 31, but passengers departing from Mumbai’s Chhatrapati Shivaji Maharaj International Airport (CSMIA) will now be paying ₹120 for domestic and ₹720 for international destinations till March 31 next year.
The implementing authority, Airports Economic Regulatory Authority (AERA), said that the situation will be reviewed again by the end of December 2021, and a decision will be taken based on the report of an independent auditor appointed by the Airports Authority of India (AAI).
AERA stated that it had sanctioned a levy of ₹100 for every domestic passenger and ₹600 for every international passenger at Mumbai International Airport Ltd (MIAL) in 2012, to cover a deficit of ₹3,845 crore in airport project financing, up to April 30, 2021.
Moreover, in 2016, MIAL was allowed to charge a levy of ₹20 per domestic and ₹120 per international passenger to finance the Metro works to collect ₹518 crore.
Both these levies were merged to a combined development fees of ₹120 and ₹720 per domestic and international passenger respectively and were to be charged till March 31, 2021.
However, 2020 and 2021 saw a huge impact on Indian aviation and, consequently, passenger numbers at all airports dropped, due to the Covid-19 pandemic, which severely affected the collections.
An AERA order dated March 24 stated, “… a request was received from MIAL (Mumbai International Airport Ltd.) for extension of period of levy for project development fees and Metro development fees, due to shortfall in the collection of both the levies. Airports Authority of India (AAI) confirmed that as on March 31, 2020, ₹524.6 crore are yet to be collected under project development fees, and, a deficit of ₹102.7 crore is to be collected under Metro development fees.”
AERA said that during the period April 2020 to January 2021, the number of domestic passengers reduced by 76.4% and the number of international passengers reduced by 91.9% when compared to the previous year for the same period, resulting in the collection of development fees during the period April 2020 to March 2021 to be much less than the anticipated amount. Due to this, the deficit cannot be covered by Wednesday, March 31.
AERA said that it examined the facts, and, on the basis of passenger traffic, during FY 2020-21, it expects MIAL to collect ₹80.63 crore; which means that, after the end of FY 2020 21, there will be a shortfall of ₹546.64 crore.
“So, there is a necessity to extend the levy of development fees beyond March 2021, to recover the sanctioned development fees amount. However, the traffic projections for the period FY 2021-22 and FY 2022-23 are tentative and may change depending on the Covid-19 situation and other economic factors and collection may vary from the present calculations. Accordingly, it is decided to extend the levy of development fees up to March 2022. The position will be reviewed after December 2021 and further action/ order will be issued based on such review,” concluded AERA.