Airport tariff regulator to prevent inflating costs

Airport tariff regulator AERA has come out with a tentative ceiling on capital costs incurred by aerodrome operators as it seeks to put in place a “reasonable benchmark” for determining the fee charged from users and curb possible ‘gold plating’ of expenses.

The move comes at a time when the government plans to revive and establish more airports in order to boost regional connectivity. As many as 25 regional airports are to be developed in the current fiscal. The Airports Economic Regulatory Aut-hority (AERA) has asked operators to relook at the costs proposed in their submissions and justify the increase that is above the tentative ceiling rates.

The regulator has set a tentative ceiling cost of “Rs 65,000 per square metre (sqm) of the terminal building and Rs 4,700 per sqm for the runway/taxiway/apron (excluding earthwork up to sub-grade level)”.

Ceiling costs are being fixed as a “reasonable benchmark for evaluating capital costs to be incurred by airport operators of major airports for the purpose of tariff determination on a tentative basis”, it said.