scorecardresearch

Government mulls ordinance to amend AERA Act

The AERA (Amendment) Bill 2018, which was approved by the Cabinet in December 2017, was introduced in the monsoon session, but could not be passed.

Government mulls ordinance to amend AERA Act
Government mulls ordinance to amend AERA Act

With the monsoon session of Parliament failing to pass the proposed changes in the current Airports Economic Regulatory Authority (AERA) Act that would have enabled the government to bid out new airports at the pre-determined tariff structure, the civil aviation ministry is exploring other options, including an ordinance.

The AERA (Amendment) Bill 2018, which was approved by the Cabinet in December 2017, was introduced in the monsoon session, but could not be passed.

This Bill basically changes the current practice of determining tariffs for aeronautical as well as non-aeronautical services levied by airport operators through a cost-plus model fixed for every five years, to a mechanism where tariffs are fixed for a certain period in the bid document itself indexed to inflation. “We are looking at all options (to implement changes to the AERA Act). It is an important piece of legislation. We would ideally have the changes in place before we award future airports,” an official at the civil aviation ministry said.

According to the amendments, the AERA will not determine tariff, tariff structures and development fee where such amounts are part of the bid document based on which the airport operations were awarded to a company under the public-private partnership (PPP) model.

The government plans to come out with a request for proposal to develop the second international airport in the NCR — at Jewar in Uttar Pradesh — under the pre-determined tariff policy. “The changes have to be made before inviting new bids,” the official said. The bids for another greenfield airport at Purandar in Pune could also be rolled out this year.

“The bids for PPP will be invited in October. We expect that the award will be given in December, followed by a foundation stone laying ceremony in the same month,” civil aviation secretary RN Choubey had told reporters in June.

The AERA amendment Bill also seeks to increase the threshold limit of airports managed by the statutory body from 1.5 million to 3.5 million passengers per annum.

By Arun Nayal

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

X