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DIAL's development fee comes under Supreme Court's radar

The apex court suggests that instead of burdening common travellers, VIPs should be made to shell out substantial sums for the use of plush special lounges at the airport.

Gyanant Singh | July 21, 2012 | Updated 09:14 IST

Your takeoffs and touchdowns at the Capital's Indira Gandhi International Airport could become easier on the pocket, with the development fee charged from fliers coming on the Supreme Court's radar.

The apex court observed on Friday that the airport development fee (ADF) collected from passengers at IGI Airport by Delhi International Airport Private Limited (DIAL) was unreasonable. It suggested that instead of burdening common travellers, VIPs should be made to shell out substantial sums for the use of plush special lounges at the airport.

"You are a little unreasonable with passengers. At many airports (abroad), a huge amount is charged for VIP rooms. In London, they charge 400 per passenger for a small room in a VIP lounge. Why can't you reciprocate (the measure) here?" an SC bench comprising Justice D.K. Jain and Justice Madan B. Lokur said, putting a poser to the authorities.

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The bench made the remarks during the hearing of a petition filed by the NGO Consumer Online Foundation (COF), challenging the legality of levying ADF. While every embarking domestic passenger is charged Rs 200 as ADF at IGIA currently, each international flier has to fork out Rs 1,300.

The bench also noted that the development fee levied and collected by DIAL will be credited with AAI and kept in a separate account for future development. Thus, the gap would be bridged for future projection, it stated.

Furthermore, the SC issued notices to the Union government and Airport Authority of India (AAI) on Friday and directed them to respond to the NGO's petition. COF had initially reasoned that the Airports Economic Regulatory Authority (AERA), which controls tariffs and other charges for aeronautical services rendered at airports, could not have determined and permitted ADF on an application by DIAL because the latter is a private entity.

COF had further argued that if AAI was empowered to levy and collect ADF, the fee could not have been determined by AERA on DIAL's plea. The NGO had first questioned the decision before the AERA Appellate Tribunal, which rejected its petition on May 2.

It had thereafter approached the Supreme Court in appeal. The SC said on Friday that the issues raised could be adjudicated by the appellate tribunal and it was in favour of remanding the matter back to AERAAT. "The NGO has filed an appeal against the dismissal of its first appeal by AERAAT. In the first appeal, too, it had challenged the legality of ADF determination by AERA. This is a statutory appeal and issuing of notice is a norm. There is no stay on the levy of ADF by DIAL. The judges have only made observations," a DIAL official said. Pertinently, however, the first appeal was dismissed by AERAAT only because it was not filed within the stipulated time.

For his part, AERA chief Yashwant Bhave told Mail Today that he was not aware of the Supreme Court's observations. The fact is that though the apex court bench will decide the issue on law, it clearly seemed to be against the fee. The SC asserted that it could even have taken suo motu cognisance in this case since a load was being put on common travellers.

"Instead of burdening our passengers, can we also not charge such fees? (This could be done) particularly in the peak season during the month of June when VIP travellers from abroad arrive for vacations. If we are made to pay in pounds in London, why can't they pay in rupees here? Our airports are excellent when compared to many abroad," the apex court pointed out.

The NGO had submitted in its petition that the appellate authority ignored the fact that the "illegal levy and collection" of ADF by DIAL amounting to thousands of crores of rupees had earlier been struck down by the apex court. Seeking an intervention by the court, it contended that the matter involved "a huge element of public interest" since private lessee DIAL had been permitted to collect ADF at IGIA despite the Airports Authority of India Act, 1994 - as amended in 2003 and 2008 - expressly stating that only the AAI was empowered to do so.

The levy aims to bridge a gap of Rs 1,230 crore that arose because the airport's project cost escalated. AERA had allowed DIAL to collect the fees for 18 months - from December 2011 to May 2013.

From May 15 onwards, AERA had also raised the user development fee (UDF) - airport and navigational charges - at IGIA by an astounding 346 per cent for two years. Previously, only outgoing passengers had to pay UDF. But those flying into Delhi were also brought under the ambit of the levy. UDF is over and above ADF.

UDF for international outbound passengers travelling between 2,000 and 5,000 km is Rs 845 and Rs 699 for those flying into Delhi. For those travelling beyond 5,000 km, the levy is Rs 1,068 for outbound and Rs 881 for inbound passengers.

As regards domestic travel, an outbound passenger flying up to 500 km has to pay Rs 231, while a flier touching down after having travelled the same distance is required to shell out Rs 196. An outgoing traveller flying more than 500 km has to give Rs 463, even as an incoming passenger needs to pay Rs 391.

Courtesy: Mail Today 

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