Centre proposes fixed-yield model to attract global airport operators
New Delhi, Aug 14 : In a bid to attract global airport operators, the government on Tuesday proposed shifting from the revenue-sharing to the fixed aeronautical yield model based on the number of passenger footfalls at greenfield airports.
"The present model is revenue-sharing... the new model will be based on (the number of) passengers entering the airport. This will be the most transparent method. With new technology, the headcount is far more easier," Civil Aviation Minister Suresh Prabhu said.
In the new model, the airport operator will be allowed to earn Rs 400 per passenger per year for aeronautical services like landing and parking charges from airlines and also pay a minimum of Rs 20 and an additional concession fee per passenger per year to the concession guarantor. The additional concession fee is the bid parameter.
Sharing a draft of the new Model Concession Agreement (MCA) for greenfield airports that will remain open for public consultations till September 14, Prabhu said that it aims to make the system transparent and predictable by removing uncertainties relating to regulatory practice and revenue determination.
"We want the model to be extremely transparent and something which will not be subject to any controversy... the new regime will mean that the successful dealer will have to provide facilities that will be pre-determined in terms of quality," he added.
The concession period is 40 years and its scope is to develop, build, operate, maintain and transfer at the end of this period. There will be a moratorium on the concession fee for the first three years.
Both Rs 400 Maximum Blended Aeronautical Yield (MBAY) for 2018-19 and the concession fee per passenger will be indexed to 50 per cent inflation whereas the balance 50 per cent will have to be recovered through efficiency improvements.
Every five years, a new base rate of MBAY will be proposed and approved for the coming five years.
To prevent the bid process from failing, the government has also allowed a provision for 'Negative Concession Fee' where the proposed MBAY may not be adequate.
"Our goal is to bring in private sector investments so that we meet the goals of NABH (NextGen Airports for Bharat) Nirmaan initiative, which is accommodating a billion trips per year," Union Minister of State for Civil Aviation Jayant Sinha said.
For this, the country needs to expand its airport capacity four to five times in 10 to 15 years for which, as per the experts, it will need investment of Rs 3 lakh crore to Rs 4 lakh crore, mainly in greenfield airports, Sinha said.
The Minister said that the new model will make air travel as affordable as possible and the entire system transparent and predictable for all stakeholders.
The other aim is to increase the consumer choice related to non-aeronautical services like retail, food and beverage, entertainment and other facilities at the airport.
"We are separating the aeronautical from the non-aeronautical revenues," Sinha said.
The immediate candidate for the Model Concession Agreement will be Jewar airport, which is going to be the second airport for Delhi. Jewar will be the first test case for MCA.
"We are not determining the amount of capital expenditure the airport operator will bring in as we are not determining tariff on a cost plus basis... our main focus now will be on ensuring top-class service," Civil Aviation Secretary R.N. Choubey said
The new model puts a cap on the aeronautical tariffs to Rs 400 per passenger, which is Rs 40 less than the current charges at the top five airports of the country, as per the officials. For the non-aeronautical charges, the consumers can decide whether to spend or not.
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PM Modi speaks to Iranian president, discusses 'serious' situation in West Asia
New Delhi (PTI): Prime Minister Narendra Modi on Thursday night spoke to Iranian President Masoud Pezeshkian over the phone and discussed the "serious situation" in West Asia.
Modi expressed deep concern over the escalation of tensions in the region and the loss of civilian lives as well as damage to civilian infrastructure.
The prime minister told the Iranian President that the safety and security of Indian nationals, along with the need for unhindered transit of goods and energy, remain India's top priorities.
“Had a conversation with Iranian President, Dr Masoud Pezeshkian, to discuss the serious situation in the region. Expressed deep concern over the escalation of tensions and the loss of civilian lives as well as damage to civilian infrastructure,” Modi said in a post on X.
The prime minister also reiterated India's commitment to peace and stability and urged dialogue and diplomacy to end the crisis.
The prime minister had spoken to leaders of several West Asian countries in the last 10 days in the wake of the coordinated offensive launched against Iran by the United States and Israel, in which the Islamic country's Supreme Leader, Ali Khamenei, was killed last month.
In retaliation, Iran has fired drones and missiles at Israel and US military installations around the Gulf region, including the global business and aviation hubs of Dubai and Doha.
Modi earlier spoke to the leaders of Oman, Kuwait, Bahrain, Saudi Arabia, the UAE, Jordan, Israel and Qatar, and expressed concern over the attacks on their countries, and condemned the violation of some nation’s sovereignty and territorial integrity.
He also discussed the welfare and security of the Indian community residing in those countries.
Around 1 crore Indians live in the Gulf and West Asia. While about 10,000 Indian citizens live, study and work in Iran, more than 40,000 live in Israel.
