By Satyaki Paul
Recently, the Airports Economic Regulatory Authority of India (Amendment) Bill, 2021 was introduced in Lok Sabha by the Union Government. This new bill seeks to amend the Airports Economic Regulatory Authority of India Act, 2008.
What does the old bill do?
Theformer 2008 Act established the Airport Economic Regulatory Authority (AERA). The AERA as a body regulates tariffs and other charges (such as airport development fees) for aeronautical services rendered at major airports in India. The 2008 Act provides for the establishment of an Airports Economic Regulatory Authority to regulate tariff and other charges for the aeronautical services rendered at airports and to monitor performance standards of airports. However, the new amendment changes the definition if “Major Airport”—the aforesaid term means any airport which has, or is designated to have, annual passenger throughput in excess of 2 (3.5 million)or any other airport or a group of airports as the Central Government may, by notification, specify as such.
What are the objectives of the new amendment bill?
The airports, where currently the traffic potential is low and loss making are not expected to attract reasonable competitive bids. So, developing a greater number of airports through public-private partnership mode would expand air connectivity to relatively remote and far-flung areas. This approach would develop not only the high traffic volume profitable airports but also the low traffic volume non-profitable airports. In these veins, the government-of-the-day has decided to club or pair airports having profitable and non-profitable airports which could be offered in public-private partnership mode as a package to the prospective bidders.
How will the new amendment bill aid the Union Government?
The Airports Authority of India (AAI) awarded six airports— Lucknow, Ahmedabad, Jaipur, Mangalore, Thiruvananthapuram and Guwahati for operations, management and development in public-private partnership mode in February 2019. Later that year, the AAI Board, in its 190th meeting held on September 5, approved leasing of another six airports Bhubaneswar, Varanasi, Amritsar, Raipur, Indore and Tiruchi for undertaking operations, management and development in public-private partnership mode. The Ministry of Civil Aviation plans to club each of these airports with nearby smaller airports for joint development. Such new movesare in consonance with the things put forward by Union Finance Minister Nirmala Sitharaman’s Budget Speech this year, in which she said the government planned to monetise airports in tier-2 and tier-3 cities.
What are the concerns raised by the Opposition?
In the new bill there is a lack of clarity regarding the criterion for clubbing airports together. So, the government-of-the-day will also have to ensure that a monopoly situation is not created in the airport operating business while awarding a group of airports to the same entity. In a manner of speaking, the development of smaller airports will also depend on growth prospects, economic activity or tourist attractions for the non-profitable airports. Furthermore, schemes such as UDAN and UDAN-II might also be affected if a monopoly starts emerging. Thus, the government-of-the-day should timely plan and enact such policies keeping in mind these things put forward by the Opposition.