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

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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  1. Dear Devesh,

    I also went though reports in yesterday’s and today’s newspapers on the UDF and the public hearing on BIAL, where you also had drawn the attention of the panel on the shortcomings of the airport.

    Going by Mr. Brunner’s statements yesterday, I feel, BIAL is comitting the same blunder as it did earlier.

    1. Brunner says delay in implementing UDF is costing them by the day – Agreed.

    But he further goes on to say that since there is a overall drop in the airlines sector, the planned execution of the second phase will be delayed because they are able to cope up the existing and expected demand for the coming months – This is what I dont like.

    The slump in the airlines would be only temporary and has given BIAL a perfect lead time for them to plan and execute the expansion phase so that by the time airline industry recovers and is back on its feet, BIAL would be in an excellent position to handle the increased number of airlines/passengers. Another important fact is BIAL should consider all the shortcomings, failures in phase 1, do a root cause and take appropriate corrective action and ensure that these are not repeated in II phase.

    The need of the hour is also to plan the second terminal in such a way that it is minimum 3-4 times bigger than the existing 71000 sqft terminal. Also, the width and lenght of the second runway should be similar to the recently opened runway at Delhi.

    –but the disgusting this Mr. Brunner seems to think otherwise.

    Yes, Bangalore deserves not just a functional airport but a fully bigger aesthetic and a truly international airport.

    As you have pointed out, Brunner is totally insensitive to the needs of the daily users and workers at the airport. He might be feeling it is not his job, what a sham!!

    We cannot leave Brunner have his way. My opinion is the govt needs to buy out BIAL stakes and hand it over to GMR. They are doing a really good job at Delhi.

    Also, the integration of HSRL with Airport is another thing we need to relook. It would be a better proposition to link the BIAL with the proposed Metro rather than have an exclusive HSRL.


  2. Hello Kiran

    The timing of the slowdown in the air traffic is a godsend for BIAL, and they must do the root cause analysis and capitalise on this opportunity as you have so rightly said.

    Given the long lead times in infrastructure projects, pro-active planning is vital. A successful project is one that keeps just ahead of the demand curve. The higher rate of returns guaranteed by government in these projects cover the downside, when they occur.

    BIAL is the primary airport of Bangalore and should continue to remain so. It is significantly better than the terminal at HAL airport, but I agree with you, it falls short of the “global level” airport Bangalore was promised. It appears to me a case of over-selling and raising expectations to such levels that any delivery appears under-delivering. May be the reality is somewhere in between.

    However, given the lack of pro-activism, BIAL has shown in the past, and from current management statements, continues to show, there is a pressing need for the state to risk-mitigate.

    Leaving it to bureaucrats, who are at the mercy of “influence-able” political masters, has proven to be a failure. Market forces, such as re-opening HAL is the need of the hour, but this has to be done in a pragmatic manner, and with the cooperation of BIAL as a corporation.

    All of us in Bangalore identify the airport with Mr. Brunner. In his very few conversations with me, he is pragmatic. Going by previous news. It is very possible that the main stumbling block is not Mr. Brunner, but Siemens. They are the ones who stand to gain the most. But, we all tend to equate BIAL and Brunner. This is his double-edged sword.

    There has to be a dialogue between all the stake holders, and if BIAL does not cooperate, then they risk the bringing in of an alternate consortium.

    With regards to the rail link, I suggest you read my article on the HSRL. I am working on an idea for using Namma Metro. Stay tuned.