Identifier
Created
Classification
Origin
09NEWDELHI813
2009-04-23 13:28:00
UNCLASSIFIED
Embassy New Delhi
Cable title:  

AVIATION FEES ISSUE IN INDIA: SEEK GUIDANCE FOR

Tags:  PREL MARR KMGT OTRA IN 
pdf how-to read a cable
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DE RUEHNE #0813/01 1131328
ZNR UUUUU ZZH
O 231328Z APR 09
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6323
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 3348
RHEHAAA/WHITE HOUSE WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RUEIDN/DNI WASHINGTON DC
RHMFISS/HQ USCENTCOM MACDILL AFB FL
RHHMUNA/HQ USPACOM HONOLULU HI
RUEKJCS/JOINT STAFF WASHDC
UNCLAS SECTION 01 OF 02 NEW DELHI 000813 

SIPDIS

FOR PM/ISO

E.O. 12958: N/A
TAGS: PREL MARR KMGT OTRA IN
SUBJECT: AVIATION FEES ISSUE IN INDIA: SEEK GUIDANCE FOR
APRIL 30 DEADLINE FROM GOI

REF: A. 2007 STATE 106799

B. 2007 NEW DELHI 5376

C. NEW DELHI 473

D. HOLMES-POPE EMAIL 4/15/2009

UNCLAS SECTION 01 OF 02 NEW DELHI 000813

SIPDIS

FOR PM/ISO

E.O. 12958: N/A
TAGS: PREL MARR KMGT OTRA IN
SUBJECT: AVIATION FEES ISSUE IN INDIA: SEEK GUIDANCE FOR
APRIL 30 DEADLINE FROM GOI

REF: A. 2007 STATE 106799

B. 2007 NEW DELHI 5376

C. NEW DELHI 473

D. HOLMES-POPE EMAIL 4/15/2009


1. This is an action request for the Department. Please see
paragraph 3.


2. Post appreciates the Department's guidance to date on the
issue of aviation-related fees for official USG aircraft and
understands an interagency process is currently underway to
provide further guidance on a global policy. However the
issue has become a more urgent problem for us since the March
6 diplomatic note (reftel C) received from the GOI rejecting
reftel A's policy. With the imposition of an April 30
deadline (ref D),at which time Delhi International Airport
Limited (DIAL),the private entity running commercial
operations at Indira Gandhi International airport (IGI),
states it "would not be able to extend credit for airport
services being utilized by (the) U.S. Air Force at IGI
Airport," Post feels the need to seek a solution which avoids
the denial of services to USG aircraft by either the GOI or a
commercial operator in India. Post notes that outstanding
bills incurred since August 2007's policy announcement
(reftel A) from both government and non-government (i.e.
commercial) service providers now total over USD 180,000,
with approximately USD 80,000 coming from DIAL.


3. Action request: After a thorough review of the history of
this issue and what we believe is the intent of Reftel A
guidance, post recommends the following way forward towards
resolving this issue and to ensure future USG flights are not
disrupted:


A. Post requests permission to pay before the April 30
deadline bills which in our view are payable under reftel A's
guidance for landing and commercial side parking fees from
DIAL and other commercial entities in India (Mumbai
International Airport Ltd, New Bangalore Airport, New
Hyderabad Airport, Cochin Airport). An MEA contact suggested
off-the-record to Poloff that should the Embassy pay up on
past dues to DIAL, that would serve as a signal of our
intention to resolve the longer-term issue and as a result,
prevent any further action by the GOI or any other commercial
provider throughout India.


B. Subsequent to this decision, we request guidance on what
constitutes a "commercial" and/or "government" airport in

cases where ownership and operations are mixed between public
and private entities (for background, see paragraphs 4-5
below). Concurrently or alternatively, we request
guidance on whether to also pay bills from Indian Government
agencies such as the Airports Authority of India, the Indian
Air Force, and Hindustan Aeronautics Ltd.


C. As a next near step, Post recommends a team of policy and
legal experts from Washington meet with Indian authorities on
billing of aviation fees by commercial and government
entities, for which payments fall under reftel policy.


D. Finally, post believes it in the USG interest to oppose
the new Indian policy (reftel C) which said future USG
flights would only be exempt from payment if "invited," and
awaits guidance on this specific point. End action request.


4. Background. The Airports Authority of India (AAI),
working under the Ministry of Civil Aviation, manages all the
126 airports in India. In 2006, the GOI handed over India,s
two most profitable airports - Delhi and Mumbai - to private
companies to be modernized. At present, the airports which
have been privatized and managed by a private company include
Cochin International Airport, Bengaluru International
Airport, Indira Gandhi International Airport in Delhi, Rajiv
Gandhi International Airport in Hyderabad, and Chhatrapati
Shivaji International Airport in Mumbai. Each of these
airports is held by a private company and has a holding
company established to manage day to day operations and
airport business. For
example, GMR Infrastructure Ltd has created Delhi
International Airport Pvt Ltd (DIAL),a subsidiary of the
company, for Delhi Airport.

NEW DELHI 00000813 002 OF 002




5. Background continued. In India, airports may be owned by
the Central Government, public sector undertakings (PSUs),
state governments, urban local bodies, private companies and
individuals, and also by joint ventures involving one or more
of the above. For example, Kolkata and Chennai airports are
being modernized in a joint venture arrangement with the
central government and a private company. The GOI has
focused on growth and liberalization of the aviation sector
in India as an important link to develop India,s
international economic and commercial competitiveness and its
ability to attract
foreign investment. This focus has opened the door to
private investment in the sector, especially in airport
modernization projects and with new green field airports.
During this transitory period of moving the sector towards
greater liberalization, there are murky definitions within
India of what types of airports are specifically classified
as government airports. Officially, India defines government
airports as those managed by the military. However, with
increased growth in civil aviation, the GOI
has worked to share air space for civilian and defense
aircraft and there are over lapping functions and charges for
air navigation fees at what otherwise would be classified as
commercial airports.
BURLEIGH