The Rajya Sabha on July 16 passed a Bill allowing the Airports Economic Regulatory Authority of India (AERA) to bid out any new airport at a pre-determined tariff structure.
Replying to the discussion on the Bill, Civil Aviation Minister Hardeep Singh Puri said, “As many as 16 airports will be in the purview of AERA. All other airports continue to be looked after by the Civil Aviation Ministry.”
Currently, major airports with an annual capacity to handle one-and-a-half million passengers come under the purview of Airports Economic Regulatory Authority of India (AERA).
If the amendment is passed by Parliament, the definition of major airports would be changed to any aerodrome which has or is designated to have annual passenger capacity of three-and-a-half million.
The Cabinet on June 24 had approved the Airports Economic Regulatory Authority(Amendment), Bill.
The AERA is a regulator that has the powers to set the tariffs charged at airports.
The Airports Economic Regulatory Authority of India (AERA) (Amendment) Bill was last approved by the Cabinet during the Modi government’s first tenure in December 2017.
However, it could not be passed in last year’s Monsoon Session.
As a new Lok Sabha has come in place now, the older Bill has lapsed and therefore, the Cabinet approved the Bill again.
‘Govt not responsible for failure of business’
About members’ concerns about jobless employees of some of the private airlines closing down their operations in India, the Minister said, “Government cannot assume responsibility of failure of business of private party...the case of Jet Airways is already there in National Company Law Tribunal [NCLT] for resolution.”
The Minister also indicated that in in case there is no resolution of the case in the NCLT, then the government would look into it.
He also assured the members that government is making efforts to see that jobless employees of the beleaguered airline get jobs in other airlines.
He said that government has developed a portal to help those employees of the airline.
He also asked the members to pursue their States to cooperate when the issue of taxing aviation turbine fuel comes in the GST Council.
Earlier, moving the Bill, Mr. Puri informed that at present, the passenger throughput at the airports under Airport Authority of India (AAI) is in the vicinity of 344.69 million.
“So the limited purpose of this amendment is to substitute the figure 1.5 million which defined a major airport, which reflected 1.3 per cent of the passenger traffic at that point of time, by the figure 3.5 million which accurately reflects the state of traffic today but it would maintain proportionality,” the Minister said.
He noted that currently, the number of airports which are carrying high traffic has increased considerably and the government is hoping to ease the cumbersome process of fixing tariffs which the regulator had to undertake every five years.
“With the advent of privatisation and increasing number of airports being privatised, all that we are seeking to do is and in addition, it will be said that the Airports Authority shall not determine the tariff or tariff structures in the case of airports which are privatised because there the tariff structure is part of the bid which is offered at the time of privatisation,” Mr. Puri said.
Bill doesn’t serve interest of customers: Tankha
While participating in the debate, Congress member Vivek K. Tankha said the Bill will not protect the interests of 344 million people (figure of airline passengers) but will deeply affect their pockets.
He highlighted the need for a level playing field and said by amending the definition of a major airport, the regulator’s jurisdiction was being reduced and handed over to private entities.
“Today about 31 airports come in the category of major airports. Out of that, I think immediately because of the change of definition, they will now cover only 16. So rest of the airports you are leaving either to the diktats of airport authority or private operators,” Mr. Tankha said.
This amendment does not subserve the interest of consumers.
Mahesh Poddar of the BJP expressed support for the Bill and said the proposals are far-reaching in nature and in line with the current air traffic scenario.
N. Gokulakrishnan of the AIADMK said passengers will stand to benefit from the amendment to the Bill.
Ahamed Hassan of AITC said there is apathy in the Indian aviation sector and has become unlucrative due to bad government policies.
Air tickets will be costlier: Surendra Singh
Surendra Singh Nagar of SP said that privatisation of the airports and bidding system would impact the growth rate of sector, which is growing at around 10%.
“After this Bill, the government would not be able to fulfill its target to take the air travel to common man,” he said, adding, air tickets would be costlier after this.
Moreover, he also raised the issue of compensation being paid by the U.P. government to farmers for acquisition of land for the proposed airport at Jewar.
According to him, the State government has declared the land acquired for Jewar airport as urban land and is paying just two times of the price, while it has to pay four times of the prices as it is an agricultural land.
Amar Patnaik of BJD said there was no need for another regulator as provided under the Bill.
