Parliament clears AERA bill, bidding for new airports can be done on pre-determined tariff

Lok Sabha on Saturday unanimously passed the Airports Economic Regulatory Authority (AERA) of India (amendment) Bill, 2019 that allows bidding out of any new airport on a pre-determined tariff structure.

The AERA bill was earlier cleared by the Rajya Sabha on July 16, and will now become a law after the president’s approval. The bill aims at increasing threshold for an airport to qualify as a major airport while limiting the tariff-fixing power of airport regulator to few select airports.

At present major airports with an annual capacity to handle 15 lakh passengers come under the purview of AERA.

Now with the amendments the new definition of major airports would be changed to any aerodrome which has or is designated to have annual passenger capacity of 35 lakh.

Civil aviation minister Hardeep Singh Puri in the parliament said, “The two airports – Mumbai and Delhi – which were privatised in 2006, account for 34 percent of the air traffic. Safeguards built in the request for proposal that no state of monopoly is reached,” he said.

Puri said that Patna airport expansion is in progress. “Joint use of airport with Indian Air Force has been approved and as soon as Bihar government gives land for greenfield airport, progress in the project will be made,” he said.

AERA will concentrate on airports which will have annual more than 35 lakh, he said. “Tirupati is a declared international airport. Decisions on who wants to operate from a particular airport is made by the carrier, which is why no international flights operate from there. Air India is under unsustainable burdens due to these reasons, which is why we are looking at privatising it,” Puri gave maintained.

Defending his government’s views Puri said “The Bill will not affect the AERA powers and performance will not be compromised. After the amendment, 16 of the airports will fall under jurisdiction of AERA. Remaining 17 excluded airports will be regulated by the Ministry of Civil Aviation,” said Puri.

All the other airports which would not be Major airports will continue to be looked after for debated questions (tariff regulation) by the Ministry of Civil Aviation and the Government of India, he said.

Now many airports for which various fees such as landing and parking charges which are currently determined by AERA will go away. Tariff at these airports would be determined by the Ministry of Civil Aviation.

The Modi government claimed that amendments in the 2008 AERA act aims at easing the burden of the airport regulator as with exponential rise in air passenger traffic.

It insisted that it has become difficult for AERA to efficiently determine the tariffs and monitor the service standards of major airports with its limited resources.

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