Flying out of Mumbai will be cheaper for both domestic and international passengers following the Supreme Court order on Tuesday holding levy of Airport Development Fee (ADF) as invalid.
At Mumbai, a domestic passenger pays Rs 100 while an international passenger pays Rs 600.
However, the order will not affect Delhi International Airport Ltd (DIAL), said the GMR Group, which operates Delhi airport and manages its modernisation.
“We direct that Mumbai International Airport Ltd (MIAL) will, henceforth, not levy and collect any development fee at Mumbai until an appropriate order is passed by the Airports Economic Regulatory Authority (AERA),” the court said.
Mumbai to discontinue
A MIAL spokesperson said it would discontinue collecting ADF. He added that the airport had been given approval for collecting Rs 1,543 crore through ADF and had collected around Rs 600 crore so far.
“We will have to study the order and understand its implications following which we will be able to decide on future steps,” the spokesperson added.
ADF is a levy that a departing passenger pays the developers for the airport's future upgradation, expansion and development.
DIAL said that the Supreme Court has allowed it to continue charging ADF as it had the AERA approval. “The apex court has also observed that in view of the facts of the case, DIAL shall not be obliged to refund any amounts collected by it, prior to the AERA approval. The court has directed that the utilisation of ADF recovered by DIAL shall be only for the purposes of Delhi airport's development,” DIAL said.
Currently, every domestic passenger departing from Delhi pays Rs 200 while a passenger flying abroad pays Rs 1,300 as ADF.
The Government permitted DIAL and MIAL to levy ADF in 2009. While Delhi airport was allowed to levy for 36 months, Mumbai airport was allowed to levy the fee for 48 months.
Between March 2009 and January 2011, DIAL collected Rs 1,265 crore as ADF, according to AERA. Justifying the levy of ADF in Delhi, the Civil Aviation Ministry had, in 2009, said that the fee was being levied on an “ad hoc basis” to fund an estimated shortfall of Rs 1,827 crore in the project.
DIAL had estimated that the project would cost Rs 8,975 crore. It was to be raised through rupee term loan, external commercial borrowings, base equity and refundable security deposits from the hospitality district.
“The ADF collected till now cannot be refunded as it is neither possible nor easy to identify passengers and give refund. But DIAL and MIAL will have to submit accounts to AERA and AAI,” Mr Anurag Sharma, Lawyer, Consumer Online Foundation said. The Foundation had filed a petition in the Supreme Court pleading that such a levy could only be charged by a Government body, such as the AAI, and not by private bodies DIAL and MIAL.
On the BSE today, shares of GMR Infrastructure and GVK Power dropped 3.16 per cent and 4.5 per cent, respectively.