New Delhi’s Indira Gandhi International Airport
The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) passed its judgment today on pleas against the Delhi airport tariff order six years after appeals were made against 346 per cent increase in user charges.
The appeals related to 2012 order. At present, the 2015 tariff order is in force.
“Except to the extent indicated, we find no good reason to interfere with the impugned tariff order. The appeals are disposed of accordingly,” said Justice S K Singh, B B Srivastava and A K Bhargava in their order.
“We expect the authority to take up the exercise of truing-up (adjustments) wherever required in right earnest in all subsequent exercises,” the three-member bench remarked
The Airport Economic Regulatory Authority (AERA) had allowed for 346 per cent increase in user charges for the period 2009-14. The order was passed in 2012, nearly three years after the start of the control period and the time frame for recovery of charges was curtailed to 22 months.
Upset over the decision, airlines moved the tribunal. Their plea was for reduction in tariff as assets and services were wrongly classified and the regulator had erred in allowing cost escalation in project cost.
The Delhi International Airport Limited too challenged the 2012 order seeking a higher return on equity than what was allowed for in the order. The airport operator also demanded returns on refundable security deposits.
“Prima facie, the tribunal has adopted a fair approach in the interest of the sector. There does not seem to be any immediate increase in tariff. The judgment will need to be given effect to by the regulator in its future exercise which may result in some increase in tariff,” said advocate Poonam Verma who appeared for Federation of Indian Airlines.
“The TDSAT judgment has laid down principles to be followed by AERA in the third control period,” said advocate Milanka Chaudhary who appeared for DIAL.
“On preliminary reading we are glad to note that TDSAT has upheld the principals of Operations Management and Development Agreement and State Support Agreement, upheld determination of charges overlapping into the period prior to formation of AERA and has referred certain matters back to AERA for reconsideration. We are also glad to note that TDSAT has allowed return to be given on deposits used for funding aeronautical assets. With less than a year left in the second control period, we expect that the uplift impact of the TDSAT order to reflect in the tariff determination by AERA for the next control period starting from April 1, 2019,” DIAL said in an emailed response.
The bench upheld the levy and determination of user development fee but said its use and appropriation must be transparent. It upheld DIAL's plea and said that refundable security deposit of Rs 14.71 billion cannot be zero cost debt. “Its cost needs to be ascertained and made available to DIAL through appropriate fiscal exercise at the time of next tariff redetermination,” it said.
However, the bench also held that merely appointing a third party to conduct a task would not change the classification of service from aeronautical to non-aeronautical ruling against the airport operator. “ The colour of revenue from aeronautical service cannot get changed to that of revenue from non-aeronautical service, by an act of delegation or leasing out by the concessionaire.