The Ministry of Civil Aviation on Monday announced the draft guidelines for user development fees at airports, a charge that authorities levy on passengers on international flights.

The fee is levied to enable developers and managers of an airport to bridge the gap between admissible expenditure and admissible revenue.

As per the guidelines - to be finalised after discussions with stakeholders, any project cost will depend on several factors: accepted norms, aviation-related costs, level of transparency in bidding while awarding contracts, and targeted capacity creation.

Admissible expenditure, which will be passed into the tariff, is the cost of capital employed, depreciation, operation and maintenance and taxes.

For estimating the cost of the capital employed, cost of debt on actual basis and 14 percent return on equity will be considered.

To estimate the admissible revenue, the sum of the total aeronautical revenue and a portion of non-aeronautical revenue will be considered.

To estimate the user development fee, a period of four years will be considered.

Estimated revenue and costs will be quoted by the company based on the traffic growth over the past five years.

The guidelines advocate a review after two years.