Wednesday , 28 October 2020

BIA domestic UDF fixed at Rs. 375 on par with RGIA

The Deccan Chronicle reports that the ministry of civil aviation (MoCA) is ready to roll out the User Development Fee (UDF) for Bengaluru International Airport Limited which is likely to cheer air passengers but leave the promoters red faced. While the UDF for domestic passengers will be Rs 375, international travellers will have to fork out Rs 1,000 every time they fly out of BIA. The decision comes as a blow to the private operator as they have said that non-approval of the proposed UDF has caused huge losses to it.

Highly placed sources in MoCA say the long pending decision was taken after scrutinising the capital cost of the airport which was put at Rs 2,470 crore by BIA. “The Hyderabad international airport was considered as the benchmark as it is bigger and better than BIA in many ways and was also being built simultaneously. While GMR Group, the lead consortium for Hyderabad airport pegged their expenditure at Rs 2,370 crore, BIA was on little higher side. So after deliberations we have decided to fix the UDF on par with Hyderabad airport,” sources said.

“The procedure for arriving at the UDF was based on the cost incurred on the project. In this connection, the private operator had earlier sent the internal audit report but we sought an independent engineer’s report and it was carried out by international firm Scot Wilson as the evaluation of expenditure should be done from an arm’s distance. The same firm which gave the completion certificate for BIA,” sources said.

BIAL had sought approval for Rs 675 as UDF for domestic passengers and Rs 1,075 from international travellers. The proposal was pending before the MoCA for the last five months as it was considered high. “After carefully assessing the costs and public sentiments, the officials and representatives of AAI, felt that the charges should be on par with Hyderabad airport,” he said.

“It was felt that it was unfair to further burden passengers who already feel that BIA is inferior to Hyderabad airport. The BIAL hasn’t collected UDF for the last five months and we have to factor in this to make up for the losses incurred. A final decision will be taken after we work out all these modalities,” the officials said. The decision comes at a crucial time when BIAL is rethinking about its expansion plans due to the global meltdown.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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