SC quashes levying of Airport Development Fee on passengers

New Delhi: Passengers travelling out of Delhi and Mumbai airports would no longer have to pay Airport Development Fee (ADF) with the Supreme Court on Tuesday quashing the levy which has yielded about Rs 2,500 crore in two years.

Hearing an appeal against the Delhi High Court`s order which had upheld levying of ADF, a bench of Justices Cyriac Joseph and A K Patnaik set aside the policy of airport developers on the basis of which passengers departing from Delhi airport had to pay a fee of Rs 200 for domestic travel and Rs 1,300 for international trip and Rs 100 and Rs 600 respectively for those departing Mumbai airport.

NGO, Consumer Online Foundation, had contended in the appeal that the fee was illegal as it was not approved by Airports Economic Regulatory Authority of India (AERA).

Unconfirmed estimates said GMR-led DIAL had collected about Rs 1,200 crore till 2010 through the ADF and the GVK-led MIAL collected Rs 1,300 crore.

The fee was being collected from March 1, 2009, at Delhi airport and from April 1 the same year from passengers at Mumbai airport. During 2009-10, Delhi airport had recorded passenger traffic of little over 25 million, while it was 28.1 million for Mumbai in 2010.

The government had decided that the ADF receipts would be deposited in a separate escrow account. The Airports Authority of India (AAI) and the Government would have supervising powers over these escrow accounts to ensure that all receipts are properly accounted for and utilised only for permitted purposes of airport development.

The NGO, in its petition, had pleaded that such a levy can only be charged by a government body like Airports Authority of India and not private bodies like Delhi International Airport Ltd (DIAL) and Mumbai International Airport Ltd (MIAL).

Earlier, the Delhi High Court had in August 2009 rejected the petition of the NGO, ruling that private airport developers were free to charge ADF from passengers and that barring it would have damaging consequences for the Public Private Partnership Model.

DIAL had earlier estimated that the modernisation, upgradation and development of Delhi airport would be implemented at a cost of Rs 8,975 crore. The cost, according to official estimates, later went up to Rs 12,718 crore.

The development fee, according to the Civil Aviation Ministry in 2009, was being levied on an "ad-hoc basis" for 36 months to fund an estimated shortfall of Rs 1,827 crore in the project cost.

Meanwhile, the spokespersons of the two private-led consortia DIAL and MIAL said they would respond only after perusing the copy of the Supreme Court order.

"We are yet awaiting a copy of the order and will be in a position to respond only after perusing the same, a DIAL spokesperson said, while his MIAL counterpart said "we will think about the future course of action after studying the details".