Annexure II - AERA

More documents

Recommendations

Info

NERA Economic Consulting only at the time oftaking it out ofRAE and would not monitor any fluctuations in its value thereafter.,,2 According to this order these principles would apply to GMR Hyderabad International Airport Limited (HIAL). In this context, HIAL has asked us to carry out an analysis of land treatment, providing examples of regulation in other jurisdictions. Our analysis will present international evidence and will draw some conclusions. Airport land can be used for both aeronautical activities and non aeronautical activities. The international evidence on land used for non aeronautical activities varies across jurisdiction as a single rule does not apply. The use of land for non aeronautical activities comprises a variety of conunercial activities like retail shops , car parking and real estate development. The real estate development is defined as the development and management of different kind of airport areas, for example hotels, conference centers and shopping malls. In case where a dual till regulation applies, non-aeronautical activities are excluded from regulation. In case where a single till regulation applies, in many instances, the regulation allows some non aeronautical activities to be excluded from the regulatory till. In case where a hybrid till regulation applies, only some non-aeronautical activities are included in the regulatory till and only part of their profits is included in the till. Another issue related to the treatment of land concerns the treatment of surplus airport land, i.e. land in excess of what is needed for aeronautical use. This land, in some instances, can be sold and the airport operator can retain all revenues. This memorandum is structured as follows: • Section 2 provides an international benclunark on the inclusion of the land used for non aeronautical purposes on the perimeter of the regulatory till; • Section 3 describes how surplus airport land is treated in other jurisdictions; • Section 4 concludes. Articles from 7.5.1 to 7.5.5 of Order No. 13/2010-11 issuedby AERA 2 Annexure II-B CP No. 9/2013-14/T-12023(14)/1/2012- Tariff- Vol - III Annexure II-B Page 40 of 51
NERA Economic Con sulting 2. Inclusion of the land used of commercial purposes on the perimeter of the till We have examined how airport regulation treats land used for non-aeronautical activities in the following countries: Australia, Belgium, Denmark, France, Germany, Ireland, Italy , New Zealand, South Africa, The Netherlands and UK. For each country we have detected whether and to what extent revenues of nonaeronautical activities contribute to cover costs ofaeronautical activities. We have then made specific reference to revenues of land used for non-aeronautical activities. The results of our analysis are the following: • Under dual till regulation non-aeronautical activities are out of the scope of the regulated till; real estate is excluded in Germany at Frankfurt and Hamburg, in Italy at the major airports and in Netherlands at Amsterdam (with the exception of hotels); • In general, there is no pure single till regulation. Selected non aeronautical activities, where no general rule applies, are excluded from the regulatory till. More specifically, real estate is outside the regulatory till in France at ADP and in Belgium at Bruxelles airport. Real estate is included in Ireland at Dublin airport, at South African Airports, in UK at Heathrow, Gatwick and Stansted (but hotels are outside). • Where a hybrid till applies, non-aeronautical activities are partially included in the regulatory till. This is the case of Denmark, as at Copenhagen, where between 10% and 50% of the margin of non-aeronautical activities is used to remunerate costs of aeronautical activities, and of Italy, at all airports but the large ones, where it is used 50% of the margin of non-aeronautical activities, but only if such activities are provided under monopoly or locational rent. The same principles apply to real estate in both countries. • Finally, where ex post monitoring applies, as in the case of major Australian and New Zealand, non aeronautical activities, including real estate, are excluded by any regulatory till. Table 2.1 summarizes the international evidence examined. 3 Annexure II-B CP No. 9/2013-14/T-12023(14)/1/2012- Tariff- Vol - III Annexure II-B Page 41 of 51
Page 1 and 2: Annexure II-B CP No. 9/2013-14/T-12
Page 3 and 4: ("Authority") was established on iz
Page 5 and 6: As already mentioned earlier, MoCA
Page 7 and 8: Conclusion: The Concession Agreemen
Page 9 and 10: a. Land LeaseAgreement As per Claus
Page 11 and 12: derive any material commercial adva
Page 13 and 14: Regulatory Approaches in Selected C
Page 15: The summary of such analysis is rep
Page 20 and 21: NER A Economic Consulting "Given th
Page 22 and 23: NERA EC() 110 n 11C CO I1
Page 24 and 25: NERA Economic Consul!inS1 In other
Page 26: NERA Economic Consult ing 5. Conclu
Page 29: NERA t:COIIOlJ1IC COllsul:in9 activ
Page 33 and 34: NERA tC Oll 0 rn ic ConsulU nq B.5.
Page 35 and 36: NERA Ecol1omi c Consulung • A dua
Page 38 and 39: NERA Economic Consultinq • Real e
Page 42 and 43: NERA Economic Consulting Table 2.1
Page 44 and 45: NERA Economic Consulting 2.5. Germa
Page 46 and 47: NERA Economic Consulting • sub-co
Page 48 and 49: NERA Economic Consulting industrial
Page 50 and 51: NERA Economic Consulti ng 4. Conclu

Annexure II - AERA

Create successful ePaper yourself

Delete template?

Save as template?