RS clears AERA Bill: Regulator to fix tariff at fewer airports

Air India

New Delhi, July 16 (IANS) The Rajya Sabha on Tuesday passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019 that seeks to raise threshold for an airport to qualify as ‘major airport’ and hence reducing the tariff-fixing power of airport regulator to a fewer airports.

The Bill was passed after discussion and reply on it by Civil Aviation Minister Hardeep Singh Puri.

Currently, an airport with annual passenger traffic of 15 lakh or more is defined as major airport and tariff at such airports are determined by Airports Economic Regulatory Authority of India (AERA). The Bill raises the threshold traffic to 35 lakh, so, many airports would come out of the purview of the regulator.

“After amendment, 16 of the airports will be still in the jurisdiction of AERA,” said Puri.

“All the other airports which would not be major airports will continue to be looked after for these purposes (tariff determination) by the Ministry of Civil Aviation and the Government of India,” he added.

Once the Bill becomes an Act, many airports for which various fees such as landing and parking charges which are currently determined by AERA will go. Tariff at these airports would be determined by the Ministry of Civil Aviation.

The amendment also empowers the Aviation Ministry to bid out airport projects on the basis of pre-determined tariff.

Following privatization of top metro airports, the UPA government had set up airport regulator under AERA Act, 2008. Accordingly, the AERA regulates tariffs and other charges for aeronautical services provided at civilian airports with annual traffic above 15 lakh passengers. It also monitors the performance standard of services across these airports.

The Bill to amend the AERA Act is aimed at easing the burden of the airport regulator as with exponential rise in air passenger traffic the load on AERA has significantly gone up. Further, it has become difficult on the part of the regulator to efficiently determine the tariffs and monitor the service standards of major airports with its limited resources.

Discussing the bill, various members of the opposition in Rajya Sabha argued that the regulatory authority should be strengthened to handle additional work load instead of taking airports away from its tariff control.

“There is nothing great about the Bill. There is nothing bad about it, but for it to work AERA should have a proper service-level monitoring mechanism,” said an airport sector expert wishing not to be named.

When the AERA Bill was passed in 2008, there were 11 airports with annual passenger traffic of more than 15 lakh but with high growth in aviation sector, the number has almost trebled.

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