The Bill for setting up the Airport Economic Regulatory Authority (AERA) was introduced in the Lok Sabha today by the Minister for Civil Aviation Shri Praful Patel.
Following is the Statement of Objects and Reasons tabled along with the Bill:
Most of the civil airports, including civil enclaves at Defence Airports, are presently controlled by the Airports Authority of India (Airports Authority) in the Ministry of Civil Aviation. The Airports Authority, with the approval of the Central Government, fixes the aeronautical charges for the airports under its control, prescribes the performance standards of all airports and monitors the same. The Airport Infrastructure Policy formulated in 1997 provides for the private sector participation for improving quality, efficiency and increasing competition. As a result of this initiative, Greenfield airports are now coming up at Bangalore and Hyderabad in Public-Private-Partnership. A private airport is already fully operational at Cochin. Delhi and Mumbai Airports are also being restructured through the Joint Venture route for modernization and development. The trends indicate growing competition and a requirement of level playing field amongst different categories of airports in future.
At present, the Airports Authority performs the role of the airport operator as well as the regulator, which results in conflict of interest. This situation has often led to complaints of a mis-match between the aeronautical charges levied by the Airports Authority and the quality of services rendered at airports which are controlled by the Airports Authority. The Naresh Chandra Committee, set up by the Central Government to prepare the road map for civil aviation sector had recommended the setting up of an independent regulatory authority.
In the above background, it is felt that an independent economic regulator, namely, the Airports Economic Regulatory Authority(the Regulatory Authority), may be established so as to create a level playing field and foster healthy competition amongst all major airports to encourage investment in airport facilities to regulate tariffs for aeronautical services etc. It is, therefore, considered necessary to enact a law for the establishment of the Regulatory Authority to regulate tariff and other charges for the aeronautical services rendered at airports and to monitor performance standards of airports and also to establish Appellate Tribunal to adjudicate disputes and dispose of appeals.
The Airports Economic Regulatory Authority of India Bill, 2007, inter-alia, seeks to provide for –
(i) establishment of Regulatory Authority which shall consist of a Chairperson and two Members to be appointed by the Central Government;
(ii) laying down the powers and functions of the Regulatory Authority to determine the tariff structure for aeronautical services; to determine the amount of development fees in respect of major airports; to determine the amount of passenger service fee; to monitor the performance standards relating to quality, continuity and reliability of service;
(iii) establishment of an Appellate Tribunal consisting of a Chairperson and not more than two Members to be appointed by the Central Government;
(iv) laying down the functions of the Appellate Tribunal to adjudicate disputes between two or more service providers or between a service provider and a group of consumers, and to hear and dispose of appeals against any direction, decision or order of the Regulatory Authority under this Act;
(v) imposing penalties incases of willful non-compliance of the orders or directions given under the Act;
(vi) the powers of the Central Government to issue direction in the matter of policy involving public objectives.
MC/GK
More details about the AERA Bill is available on PIB release “Government clears proposed AERA Bill” dated May 3, 2007 on pib site: www.pib.nic.in