Cross Charging Report Formulates Options

The First Option

In this scenario revenue obtained for services and facilities by each organisation would be paid to the provider of the service. Revenue would be shared between the providers of joint facilities and services. Essentially this would see FAC pay Defence a fee based on the number of aircraft movements and their weights for the use of Defence owned runways such as Canberra, while the CAA would pay the military the revenue it received for charging operators for ATC and RFFS services provided by Defence.

The Second Option

The second option looks at a more wide ranging changes to the present system. Under this option the military would receive a payment from both the FAC and the CAA for the estimated cost of providing and maintaining runways, ATC and RFFS. All users, including the military, would then be charged by the CAA and FAC for services they provide. The total revenue collected for each service would be used to pay the original provider of that service.

Both options would see military aircraft charged for using private airfields and the military receiving payment for the use of its facilities and services. Both options also specify that Defence would receive payments from the CAA for the provision of enroute services. Primarily however the two options differ in how the CAA and FAC pays the military for the provision of services. Option one would see Defence paid the revenue received by the CAA for the use of Defence facilities and FAC paying a share it received for the provision of services at joint facilities.

Option two would see the FAC and CAA pay to Defence the estimated cost of facilities and services provided by Defence, while all users would be required to pay charges imposed by the CAA and FAC.

The task force’s report recommends that the second alter- native be implemented, as option one does not fully satisfy the requirement that both parties pay equally for the services and facilities. Specifically option one is inequitable where a service is required by both military and civil operators at joint operator airports – the cost should be shared propor- tionally to the use made of that service. Charges levied on an operator for the use of this service would not be in proportion to its real cost since charges are imposed at a network rate. This would result in an unrecovered cost.

Option two endeavors to charge all groups on an equal footing. In effect this means that all aircraft including military aircraft would be charged for using joint military/civil and civil facilities and services, however the CAA and FAC would pay Defence a fee for the estimated cost of providing and maintaining runways at Canberra, Darwin and Townsville and ATC services at Darwin and Townsville and RFFs ser- vices at Townsville. This is deemed to be the most equitable means of cross charging.

Implementation

The draft report recommends that option two should be implemented in two stages. This would see the introduction of charges to civil aircraft using military services and facilities and charging of the military for the use of private facilities and services. Essentially the first stage would see charges introduced where they currently do not exist in a first move towards equality and does not involve FAC and CAA charges. The report recommends that this first stage be put in place as soon as possible after July 1.

Stage two would not be introduced until July 1993, to allow the various bodies to budget for the changes and recording systems to be set in place. This stage would see charging of the military for using FAC and CAA facilities; and payments to Defence for services and facilities supplied by them but charged for by the FAC and CAA.

After a recent consultative meeting between industry representatives and the authors of the draft, current planning at this stage will see the plan going before the government for consideration and possible adoption early in July.