The Parliament on Friday passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019 that increases the threshold of annual passenger traffic for major airports to over 35 lakh with Civil Aviation Minister Hardeep Singh Puri stating that the government was committed to privatisation of Air India as its debt has become totally unsustainable.
The Bill, which seeks to amend the Airports Economic Regulatory Authority of India Act, 2008, had earlier been passed by Rajya Sabha.
Speaking during the debate on the Bill in the Parliament, Puri said that Delhi and Mumbai airports, whose privatisation was undertaken during the first UPA government, accounts for 34 per cent of traffic while six airports, whose privatisation has been undertaken under the Modi government, accounts for 6 per cent traffic.
Following demands of members, the Minister announced that Indigo will start operations by December connecting Agra to Varanasi, Bhopal, Lucknow, and Bengaluru.
He also talked about Agra’s air connectivity with Delhi and Jaipur and said there will be new bidding for Agra -Mumbai route as it had been allocated to Jet Airways.
Puri said there was a wrong narrative that the government has embarked on major privatisation intended to benefit a party.
He said that after privatisation of Delhi and Mumbai airports, nine attempts had been made for privatisation, but the same bidders emerged as there was a condition that the applicant should have previous experience. He added that the condition was then dropped and 32 bids came for six airports.
“The successful operator will have to pay Rs 2,300 crore upfront to the Airports Authority of India (AAI) and this money will be used for programmes like regional connectivity scheme UDAN and boosting regional connectivity. Out of six airports, tariffs have already been determined for five by AERA,” he said.
Puri said revenue of AAI from Delhi and Mumbai airports had gone up substantially after privatisation, adding that the request for proposals has built-in provisions against monopoly and that no employee will be declared surplus or redundant in privatisation.
He informed that the government was committed to privatization of Air India and the alternate mechanism will be pushed very early. “It is due to this mindset that government has to instruct Air India that its debt has become totally unsustainable at Rs 20 crore per day,” he said.
Puri said Rs 10,000 crore will be spent on mini-airports in tier II and III cities in the next four years.
Stating that passenger traffic was growing fast, he said: “The penetration of the civil aviation sector was seven per cent and it was growing at 17 per cent. At present, an airport with annual passenger traffic of 15 lakh or more is defined as a major airport and tariff at such airports are determined by AERA. The Bill raises the threshold to 35 lakh.”
He said that 16 major airports will be in the ambit of AERA and 17 were excluded which will not go to private players but will be administered by the ministry.
The bill provides that AERA will not determine tariff structures and development fees in certain cases including those where such tariff amounts were a part of the bid document on the basis of which the airport operations were awarded.
The AERA will be consulted by the concessioning authority before incorporating such tariffs.