tAJRPORTS ECONOMIC REGUI ATO Y AUTHORIT 0 N lA "*11"7,•.

Minute of the Sta cholders Consultation M eeting held 011

071h June) 2017 at 3.0 P M

CO NS ULTATION PAPER 0 .06/2017-18 DA ED 12.05.2017 TO CONS THE ULTIYEAR TARIFFP OPOSAL FOR D 'T ·RMINATION OFT · .S FOR 2 ND CONTROL PERIO ( FY.Ol.04.2016 TO 3 1.03.2021) IN RESPEC' • OF COC INfERNATIO ALAlRPORT COCIflN

Stakeholder Consultation Meeting was convened by the Authority on ° 7.06.2017 at 3.0 0 PM in th e Conference Room. first floor, AERA Building, Administrative Complex, Safdar jun g Airport, ew Delhi to elicit the views of the s takehold rs on the Consultat ion Pap rna. 06/2017-18 dated 12.05 .2017 issued by the Authority to conside r the Multi -year Tariff Proposal for the 2 tll1 control period (FY.2016-17 to FY.2020-21) in respect of Cochin Internat ion al Airport, Cochin. The list of participants is enclosed at Annexure- .

2 . Secre ary, AERA welcomed all the participants to the Meeting and briefly touched upon the subject matter of the Consultation Paper. The Chairman advised the stakeholders to give their written comment"; views on or b fore Monday, the 12th June, 2017.

3. The comments of various stakeholders are as follows:

COCHIN INTERNATIONAL AIRPORT, (CIAL)

3.1 Sh, Sunil Chacl 0 , CFO CIAL thanked the Authority for bringing ou t th Consultation Paper garding determination of Aeronautical tariffs in respect of Cochin Airport. He presented an overview of the tariff proposals submitted by CIAL and the analysis of the Authority. He also submitted a request to th Authorit to r consider the decision on the return to be provided on land as land was bought by CIAL at the then prevailing market pri s. He said that if there is no return provided on the same the investors willbe adversely affected. I e also requested AERA to re-evaluate the cost of equity proposed for ClAL saying that it is inconsistent with earlier orders of AERA. He presented the Annual Tari ff Plan proposed and the details of cha rges stating that CIAL has considered Affordability, Consistency, Valli added se rvice and optimum tariff as its principles for listing th charges. Sh Sunil Chacko also stated that the proposed tariff is comparabl t the nearby airports and the estimated collection is still short by Rs. 93 crores which he hoped would be permitted to be recouped in the next control period. He also gave an overview of th n w terminal commissioned by CIAL which is fully operational and informed that the enti re electricity requirement of the airport was being met from Solar power plant installed by ClAL. (A copy of the presentation is enclosed at (Annexure - II).

Chairman, AERA thanked CIAL for the presen tation and commended CIAL on th e new comm issioned terminal an d said tha t it looks comparable to other modern airports and also appreciated CIAL on th ir initi at ive to go gre n with Solar Power. He asked the s takeholders to visit and se the new Terminal at Cochin Airport . Chairman also sta ted that CIAL has not revised its landing charges since 2001 and they have in their proposal tried to keep the tariff low.

J et Airwa)'S 3 .2 Sh. Mukesh Trehan , GM (1'1 stated that in CIAL bot h X-Ray charges and Passenger Service fee are collected and in order 10 keep parity, one of these should not be collected. He also com mented thai instead ef the s teep increase proposed in Landing and ca rgo charges in first yea r-of Implementation of new tariff, CIAI.could con~i de r a gradual increase over a period of five years. . He also oomrnentcd th e t the re Conlrol Pe riod is still open and that needs to be considered. The representative of Jet airways also menlioned tha t CUTE charges are higher tha n whal is paid in other Airports. lie also remarked t hat part of the div idend paym ents could be used 10 fund costs and c harges proposed to be collected.

Bird Worldwide I' light Scoj ccli rBWHil 3.3 Sh. Sanjay Savant, CFO staled that they would submit written comments in due course.

BPCL 3.4 Sh. Praveen Gangwae, Senior Manager (Marketing) IIrCL representative informed that they support the proposa l of CIAL on the FuelThroughput charges and requested that it be made effective from II prospect ive dale.

CEI ,,'R!

3.5 Sh. Tauseef Khan COO. CEL~:B [ ste teed that they are a new entrant 10 CIAL and have no comments as yet.

mAL 3.6 Sh. Harsh Oulad, Head Regulatory. DIALsta ted that they would submit written comments within the tlmellne.

SPICEJET 3.7 Sh. Pankaj Mathur, Senior Manal',er (Standa rd) stated that they support the viewa of J et Airways on X-Ray charges and CUTE Charges and would submit written comments shortly.

APAO 3.8 Sh. Satyan Naya r, Secretary General stated that they support the proposal of CIALand would submit written comments.

lATA 3.9 Sh. Eric Antia, Campaign Manager thanked the Authority for the opportu nity provided and stated that they will submit written com men ts. Mr. Anlia at the outset, expressed disappoin tment on Hybrid Till policy adopted by AERA and said that it wi ll increase charges and reduce Air connectivity. He informed tha t Air Passengers Association has filed an appeal against the Hybrid Till Order, and requested that Orders under Hybrid Till be put on hold till the matter is decided by AERAAT or till then, assess ment of charges be made by AERA on Single Till basis. He requested AERA 10 delermine ta riff based on ICAO principles. I-I e also stated that a better mechanism to capture the service quality of Airports should be imillemented instead of only the ACI survey which solely captures the passenger experiences. He also requested AERA 10 carry out a better scrutiny of Opex costs. li e mentioned that an Airport SLA should be implemented and the bes t practice SIA document which lATA has drafted will be

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submitted to the Authority along with responses. He queried if th minutes of the s takeholder consultation which was held earlier by ClAL for the Terminal Project could be shar I I y fA . ClAL informed that though lATA had been invited to participate in the said consultatio n, however, it did not participa te . Chairperson remarked that it "vas too late to seek th e stakeholder consultati on minu tes, and said that if lATA considers any capital exp ndi tu re to be hi h or not necessary, tliose can be specificall , commented upon by rATA. H also requ ested representatives of lATA to visit Cochin to see the new t erminal. Shri Antia sa id that lATA will submit a position paper on the manner of land use. Chairperson stated that a Consultat ion Paper is proposed to be issued by AERA on treatm nt ofland and IATA can submit th ir vi ws on it. Chairperson also informed that a report on useful life of the assets has been submitted by ICAI and a Consulta tion Paper on the same shall be issued shortly by AERA. Chairperson AERA th n enq uired if ClAL would like to res pond on specific points relating to X-Ray cha rges, CUTE charges and moderating th increase of landing charges over the years.

Shri A.C.R. Nair ED & Airport Director, CIAL stated that Capital Expenditure for X-Ray screening (to the tune of Rs. 12 0 cro r s) has been incurred by CIAL to provide the mandated 360 degre CT scan. CIAL is the first Airpo rt to hay done th arne and the screening activity is also carried out by ClAL itself. He stated that th se were earlier performed by Air India and the charges proposed by CIAL are lower than that collected by Air India. On CUTE charges, CLAL noted that th is activity was earlier outsourced to SITA and was carried out by hem. The cha rg c 11 cted by SITA from Airlines is what is proposed to be call cted by CIAL when the Operations are tak en over by CIAL now, despite an additional Rs. 40 crore being spent on Capex. On steep increase in landing cha rges he commented that the rates were fixed earlier in 2001 and continued without a change and the proposed ra tes are also lov....er than nearby airports in Kerala and much lower than Chennai Airport rates. Also, after the in itia l increase, only a 5% annual increase is proposed for the remaining YC<1rs of the control period.

Chairperson , AERA informed that the first control period is closed and as stated in the Consultation Paper issu d for first control period itself, it has been proposed to not true up the first control period. This has also been stated in the curr nt Consultation Paper. Chairperson stated that X-Ray charges would have otherwis b n called as UnF, howe" r, as there are certain sensitivities around the same and in order to give the flexibility of defi ning the components of charges to the Airport Operator, the manner of breaking dovv·ll h AR into charges is left to th e Airport Operator.

Chairperson, AERA tha nked all the stakeholders for thei r active participation and requested them to furnish their comments/views on the Consultation Paper within the stated t imelines.

The Meeting ended with a vote of thanks to the chair.

(PujaJin Secretary

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Annexurc-l Jjst of Particip ants :­

.Airports Econo m ic Regulatory Authority Of India

1. Shri S. Machendranathan, Cha irperson- in Chair 2 . Shri . Shankar Member 3. Shri S. Sam anta, Member 4. Ms. Puj a Jindal, Secretary 5. Shri V.K. Sachdeva, DGM(F) 6. Shri Rajesh Khanna AGM (F) 7· Shri .Iaimon Sakaria , M nag I' (F)

CIAL 8. Sh ri Sun li Chad 0 , CFO 9· Sh ri Santhosh Poovatil, DGM(l') 10. Sh ri ran illai 11. Shri A.C.K. Nair , ED/Airport Director 12. Shri A.M. Shab eer, ED ( ngineer s rvices)

p IAL

13. Shri Harsh Gulati, Head Regulatory

lATA

14. Shri Eric Antia, Campaign Manager

Spice Jet

15. Shri Pankaj Mathur, Sr. Manager (Standards)

APAO

16. Shri Satyan Nayar, Secretary General

CEI..EBI

17. Shri Manoj Sharma, S&M 18. Shri Tauseef Khan, COO 19. Shri Tans u, Head of Commercial

BP

2 0 , Sh ri Praveen Gangwar, Senior Manager Mark ting

B'WFS

2 1 . Shri Sanjay Savant, CFO 2 2 . Shri S.K. Jha, EVP

KP . G

23. Shri Jodhbir Singh, Manager

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'13/6/201

Stakeholder Meeting on Determination of tariffs of Cochin International Airport Ltd for the

Second Control Period (01 .04.2016 to 3 1.03.2 02 1)

SUNIL CHACKO CFO, COCHIN INTERNATIONALAIRPORT LIMITED

13/6/201

Stakeholder Meeting on Determ ination of tariffs of Cochin Inte rna ti ona l Airport Ltd for t he

Seco nd Control Period (01.04.2016 to 31 .03 .2021)

SUNILCHACKO CFO, COCHIN INTERNATIONALAIRPORT LIMITED

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