July 16, 2019
Ahamed Hassan speaks on The Airports Economic Regulatory Authority of India (Amendment) Bill, 2019
Thank you for giving me this opportunity to speak on the AERA amendment Bill, 2019.
Before I move to the bill, I would like to draw the attention of the house to the fact that even though this civil aviation minister might be new, but his government is solely to blame for the mess that the Indian aviation sectoris in. Apart from Make in India, Stand up India, this government also has a policy called “sell India”, under which the government has taken the shortcut by selling loss-making government enterprises like Air India without even genuinely attempting to revive it. Not only could the government not save Air India, they failed to save Jet Airways too.
Without bailing out the owners, the government could have easily saved the jobs of 22,000 Jet Airways employees with the help of a Presidential promulgation but the government chose to turn a blind eye. Last five years of misgovernance, government apathy and negligence have made the Indian aviation sector unlucrative for investors. Some serious thinking on the part of the Civil Aviation Ministry is urgent and long overdue.
Another issue that concerns us all is the way this government has been bypassing standing committees by not sending bills for scrutiny. This session seven bills have been passed by both the houses of the Parliament and not a single bill has been sent to the standing committee. The government is in effect rendering standing committees irrelevant. Why is this government afraid of legislative scrutiny? Why is it creating a mockery of the parliament and its procedures? The government must assure the house that they will not bypass legislative scrutiny just because they have a majority.
Moving onto the bill Sir, the Airports Economic Regulatory Authority (AERA) Act was enacted in 2008 to regulate tariff and other charges for the aeronautical services rendered at airports and to monitor their performance standards.
I would like to dwell a bit on the two major amendments in the bill:
1. The new bill seeks to change the definition of a “major airport”by increasing its threshold to 3.5 million annual passengers from 1.5 million currently. The explanation given for the change is that with increasing passenger traffic, too many airports are now under the purview of the AERA and hence the authority is not able to perform their job efficiently. The bill will, therefore, reduce the ambit of the AERA as the new government rule would leave only very few airports under the ‘major airports’ classification.
It is interesting to note then when the original bill was being passed in this very house, the then Civil Aviation Minister, Praful Patel, had said that the aim of the bill is to include more and more airports under the ambit of regulatory framework over a period of time. However, with these amendments, the government is instead reducing the number of airports under the Airport Economic Regulatory Authority and going against the spirit of the original bill.
Further, the fact that this amendment has been introduced essentially means is that the airport authority is unable to keep up with the expansion of aviation market in the country and is therefore trying to reduce its burden. Sir, this begs the question: why isn’t the authority trying to solve the problem of efficiency by increasing their human resource capacity? What happens when after 5-7 years, when these airports cross even the 3.5 million annual passenger threshold? Would the government then amend act again to revise the definition?
2. Sir, the second amendment to the bill involves amending section 13 of the AERA Act, 2008 which allows for a predetermined tariff model under which the government will fix the fee to be charged by the prospective private airport operator, which will be linked to inflation for any future increase. This amendment is a welcome step as it will assure some amount of certainty for the investors with respect to potential revenue and hence attract investors to construct and operate airports in India. The move will also eliminate frequent fluctuations in charges levied on the passengers.