Aviation ministry to push for passage of amended AERA Act

NEW DELHI: In a potential incentive to investors, the civil aviation ministry will seek parliamentary passage in the winter session for an amendment to the Airports Economic Regulatory Authority (AERA) Act that will allow private airport operators to charge predetermined tariffs

The amendment is aimed at attracting investors to construct and operate airports. Currently, private airport operators have to approach AERA for permission to revise charges such as user development fee, passenger security fee and landing and parking fees.

AERA is an independent regulator that sets the tariffs charged by major airports; once the amendment is passed, airport charges will be predetermined, offering investors greater revenue certainty, and will change in step with market parameters such as inflation..

“We expect the bill to be cleared in this session which will allow predet ermined tariffs for airports,” minister of state for civil aviation Jayant Sinha said. The winter session of Parliament will begin on Tuesday.

With the monsoon session of the Parliament failing to enact the proposed changes to the AERA Act, which would have allowed the government to bid out new airports allowing pre- determined tariffs, the civil aviation ministry is also exploring other options, including an ordinance, to effect the change.

The government introduced the bill in the Lok Sabha in July. Apart from predetermined tariffs, the government has also sought a change in the definition of major airports. The Act defines a major airport as a civilian airport with annual passenger traffic of over 1.5 million. The bill increases the threshold to over 3.5 million.

Last month, the cabinet cleared a proposal to allow airports in six cities – Ahmedabad, Lucknow, Guwahati, Jaipur, Thiruvananthapuram and Mangaluru – to be developed and managed through the public private partnership (PPP) model on the lines of the Delhi, Mumbai, Hyderabad and Kochi airports.

“...we have always been committed that we are going to take our larger airports and actually put them in the private sector that is privatising those airports. We have tried a few different models for that and I think now, we are clear that we want to go to a full PPP model, like Delhi and Mumbai, where the entire airport is within the scope of the concessioner agreement...and all aeronautical and non-aeronautical revenue will accrue to the concessioner,” Sinha told Hindustan Times in an interview in November.