No tunnel route to Kempegowda International Airport if user fee is cut

BENGALURU: The fate of Bangalore International Airport Ltd’s (BIAL) ambitious eastern connectivity tunnel project, planned as the third access route to the airport, hinges on the proposed slashing of User Development Fee (UDF) to be finalised by the Airports Economic Regulatory Authority (AERA).

If UDF collected from passengers at Kempegowda International Airport is slashed, BIAL may drop the tunnel project due to lack of funds. BIAL had proposed a 2.67-km tunnel at a cost of about Rs 1,200 crore to help passengers from East Bengaluru reach KIA faster.


BIAL wants present UDF till March 2021

The Airports Economic Regulatory Authority (AERA) proposed slashing UDF for domestic passengers from Rs 306 to Rs 79.20 and for international passengers from Rs 1,226 to Rs 316.80. While this tariff is expected to come into effect from next month, BIAL wants the present UDF to be continued till March 2021.

BIAL managing director and CEO Hari Marar said it has proposed a Rs 12,000-crore airport expansion plan which includes a new south parallel runway, taxiways and apron, second terminal building, eastern connectivity tunnel and related utilities. “If AERA slashes UDF, we may have to relook at some expansion plans like the eastern connectivity tunnel project due to lack of funds,” he said.

The tunnel underneath the under-construction second runway was to be linked with State Highway 104 and East Cargo Terminal to give a third access point for passengers. Currently, there are two access points: through Trumpet Interchange on Ballari Road and the newly opened South Western Road. With the number of air passengers likely to increase from the present 26 million to 70 million by 2030, traffic congestion to and from the airport will get worse.

“The eastern tunnel was planned considering the airport’s future growth. It would have also reduced traffic on the Hebbal flyover by 30%-40% since about 98% of traffic gets choked there” said Marar.

‘Fares won’t reduce’

If AERA slashes UDF for domestic and international passengers this year, it will result in ‘tariff shock’ for commuters from the next control period, says BIAL. The UDF is revised once every five years based on investment in an airport. The UDF in the third control period (April 1, 2021 to March 31, 2026) would be higher.

AERA will soon finalise UDF for the second control period which was due for renewal in April 2016. Tariffs for the second control period from April 1, 2016 to March 31, 2021 will come into effect on September 1. “If AERA maintains the same tariff for the remaining 2.5 years of this control period, the amount will be adjusted to the next control period to minimise tariff shock for passengers in the next control period. There will be a sudden spike in tariff in the next control period if we don’t maintain the same tariff till March 2021,” said Marar.

He said reduction of UDF will not reduce price of flight tickets as fares are based on supply and demand. “It’s a myth that ticket prices will decline after UDF reduction,” said Marar, adding “Collection of the same tariff will ensure sufficient cash flow for BIAL to ensure timely capacity investment.”