From UPSC perspective, the following things are important :
Prelims level : AERA
Mains level : Read the attached story
- The Rajya Sabha has passed a Bill allowing the Airports Economic Regulatory Authority of India (AERA) to bid out any new airport at a pre-determined tariff structure.
- The AERA (Amendment) Bill was approved by the Cabinet in December 2017.
- AERA is a regulator that has the powers to set the tariffs charged at airports.
- Sixteen airports will be under the jurisdiction of AERA.
- All the other airports which would not be major airports will continue to be looked after by the Ministry of Civil Aviation and the Govt. of India.
- Currently, all major airports with an annual capacity of handling 1.5 million passengers come under the purview of AERA.
Promises of the amendment
- At present the passenger throughput at the airports under Airport Authority of India (AAI) is in the vicinity of 344.69 million.
- So the limited purpose of this amendment is to substitute the figure 1.5 million which defined a major airport, which reflected 1.3 per cent of the passenger traffic at that point of time, by the figure 3.5 million.
- This accurately reflects the state of traffic today and maintains proportionality.
- If the amendment if effected, the definition of major airports will change to any aerodrome which has or is designated to have an annual passenger capacity of 3.5 million.
Why such bill?
- The number of airports which are carrying high traffic has increased considerably and the government is hoping to ease the cumbersome process of fixing tariffs which the regulator had to undertake every five years.
- With the advent of privatization and increasing number of airports being privatized, the Airports Authority shall not determine the tariff or tariff structures in the case such airports.
- This is so because the tariff structure is part of the bid which is offered at the time of privatization.