TIA fleecing international passengers for 8 years..

Kathmandu , May 20th 2019

The fact that the top honchos of the Civil Aviation Authority of Nepal have been using their statutory autonomy for feathering their own nests and preventing the organisation from delivering on its envisaged goals pronounced in the act of 1996 is no longer a matter of speculation, stakeholders have claimed.
However, it is the depth of decadence by a self-serving monopoly that has been allowing another aviation monopoly to recklessly fleece international passengers for the last eight years that has also shocked industry observers.

According to stakeholders, as is the worldwide practice, tariff may only be collected under the title of airport development charges (ADC), when the paying users actually get to use the facilities. This implies that the facilities have to be ready before the users can be charged. Besides, this development implies facility additions and not maintenance of existing facilities.

CAAN has opened its ADC pool worth Rs four billion, accumulated by collecting Rs 1,000 per departing international passenger since July 2014, to finance runway refurbishment works at Tribhuvan International Airport that does not qualify as development in any sense of the word.

It is simply for the maintenance of the runway that degrades with usage. “How the wizards of CAAN were able to convince the Ministry of Finance to accede to this weird request is anybody’s guess,” a senior official at the Ministry of Culture, Tourism and Civil Aviation, said.

Besides, this daily has also uncovered a scandal involving a contract with a France-based commercial aviation telecommunication services provider, SITA, dating back to 2012. Then, the CAAN authorised the TIA Civil Aviation Office (TIACAO) to enter into a contract agreement with SITA to provide common use terminal equipment (CUTE) at TIA.

The CUTE terminal allows airline operators at TIA to share check-in desk facilities for checking-in passengers, printing boarding passes and baggage tags, etc. These services are provided by SITA for a fee that is passed on to air passengers. CAAN in its Airport Service Charge Regulation, 2067, under schedule-22f has specified the rate as $1 per passenger applicable since April 2014.

What is shocking is that this rate contrasts shockingly with what SITA had offered to airports in India including Indira Gandhi International Airport (IGIA) in the same time period — 2013-14.

A review of the tariff order issued to IGIA by the Airports Economic Regulatory Authority of India states the rates to be charged by IGIA as INR 1,500 per departing international flight and INR 500 for departing domestic flight.

The order allows for a nominal annual inflation rate. Clearly, for a wide-body jet like those departing Kathmandu, the per capita tariff collected by the Delhi airport comes to about 10 cents on international flights and even lower for larger aircraft.

Similar are the terms offered to Mumbai airport since 2012-13 when CUTE was first introduced. In fact, the rate for domestic departure is INR 6,500 per counter per month.

Clearly, the above contrast implies that either CAAN is unscrupulously pocketing the excessive margins or SITA has been taking CAAN for a ride, by influencing the TIA’s contract negotiators by offering incentives including financing foreign vacations that can be verified from their respective passports. TIA as well as CAAN senior officials, however, refused to comment.

With over two million outbound international passengers from TIA in 2018, the CUTE tariff collected is over $2 million and the accumulated amount over the period since CUTE was first introduced easily exceeds a billion rupees.

Why the CAAN head office chose to issue the subordinate TIACAO with the financial authorisation for issuing the bid for CUTE in 2012 and again now rather than administering it itself under corporate department needs to be investigated for possible acts of substantial misappropriation, a senior manager at CAAN shared on condition of anonymity. “Because, if and when the Gautam Buddha International Airport (GBIA) comes into operation, would a separate CUTE contract be required to be inked between SITA and GBIA at identical or worse rates?”  he queried.

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