TELECOM DISPUTES SETTLEMENT & APPELLATE TRIBUNAL NEW DELHI Reserved on:10.03.2026 Pronounced on: 29.05.2026 AERA APPEAL/2/2025 Mumbai International Airport Ltd. …Appellant Versus

1. Airports Economic Regulatory Authority of India;

2. Federation of India Airlines. …Respondent(s)

BEFORE:

HON’BLE MR. JUSTICE DHIRUBHAI NARANBHAI PATEL (CHAIRPERSON)

HON’BLE DR. SANJEEV BANZAL (MEMBER)

FOR APPELLANT FOR RESPONDENT(S)

In AERA Appeal No.2/2025 In AERA Appeal No. 2/2025 For MIAL For AERA (R-1) Mr. Sajan Poovayya, Senior Advocate Mr Ritesh Kumar Ms Amrita Narayan Mr Dheerendra Singh Bisht Mr Palash Maheshwari Ms Shalini Prasad Mr Raghav Tiwari Ms. Yashasvini Chandra For R1;

Mr Madhav Sharma For FIA(R-2)

Mr Buddy Ranganadhan, Sr Adv Ms Nishtha Kumar Mr Prantar Basu Choudhury Mr Shrom Sethi For R2;

INDEX S. No. CONTENT Page No. s

1. SUMMARIUM 4

3. ABBREVIATIONS INVOLVED 5 to 9

5. FACTUAL MATRIX 10 to 12 6. ARGUMENTS OF THE APPELLANT 13 to 38 7. ARGUMENTS OF THE RESPONDENTS 39 to 52 8. REASONS & ANALYSIS 53 to 283 9. Issue No. I: Normative Costing Methodology 63 to 69 10. Issue No. II: Cost of Debt for Third Control Period 70 to 83 11. Issue No. III: General Aviation (GA) Terminal 84 to 88 considered as non-aeronautical asset by AERA

12 Issue No. IV: Adjustment on account of demolition of 89 to 95 Terminal-1 building in HRAB in FY 2029

13. Issue No. V: 1% Penalty on Capex not incurred 96 to 104 14. Issue No. VI: Inclusion of "Annual Fee" in 105 to 113 determination of "S" factor

15. Issue No. VII: Inclusion of "Other Income" in 114 to 122 determination of "S" factor

JUDGEMENT

Per Justice D.N. PATEL, Chairperson SUMMARIUM This appeal has been preferred by Mumbai International Airport Limited (MIAL), the operator of Chhatrapati Shivaji Maharaj International Airport, Mumbai (CSMIA), under Section 18(2) of the AERA Act,2008 against Order No. 01/2025-26 dated 07.05.2025 passed by the Airports Economic Regulatory Authority of India (AERA), determining the aeronautical tariff for CSMIA for the Fourth Control Period commencing 01.04.2024 and ending 31.03.2029.

The appeal raises multiple issues relating to the regulatory treatment of capital and operating expenditure, allocation of costs between aeronautical and non- aeronautical activities, and the methodology adopted by AERA in determining key parameters forming part of the Aggregate Revenue Requirement (ARR).

The Respondents, on the other hand, defends the impugned tariff order by asserting that the determinations have been undertaken in accordance with its statutory mandate under Section 13 of the AERA Act, 2008. It is contended that the AERA, as the sectoral regulator, is empowered to examine the prudence and efficiency of expenditure.

In the present proceedings, this Tribunal is called upon to examine the rival contentions advanced by the parties and to adjudicate upon the issues arising from the impugned tariff determination within the framework of the AERA Act, the governing concession agreements, binding precedents and the applicable principles of regulatory jurisprudence.

ABBREVIATIONS INVOLVED AERA APPEAL NO. 2 OF 2025

1. This appeal has been preferred under Section 18(2) of The Airports Economic Regulatory Authority of India Act, 2008 against the order passed by Respondent- Airports Economic Regulatory Authority of India (hereinafter referred to as AERA) bearing Order No. 1/2025-26 dated th

07.05.2025 (for 4 Control Period)

2. That the 4 th Control Period is from 01.04.2024 to

31.03.2029. This order has been passed by AERA under the AERA Act. This appeal is in respect of Chhatrapati Shivaji Maharaj International Airport, Mumbai (hereinafter referred to as CSMIA for the sake of brevity).

FACTUAL MATRIX A. In 2004-2005, the Airports Authority of India (AAI invited tenders from private participants competent to and desirous of operating, maintaining, developing, designing, constructing, upgrading, modernizing, financing and managing the CSMIA, Mumbai.

B. Earlier a consortium led by the GVK Group was awarded the bid