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Govt to amend AERAI Bill to appoint ombudsman

Government decides to amend a Bill to appoint an ombudsman for regulating tariff structure at all airports as also competition among fuel suppliers there.

india Updated: Aug 29, 2008 14:54 IST

Government on Friday decided to amend a Bill to appoint an ombudsman for regulating tariff structure at all airports as also competition among fuel suppliers there.

The Union Cabinet, at its meeting chaired by Prime Minister Manmohan Singh, decided to accept several recommendations of the department-related Parliamentary Standing Committee on the Airports Economic Regulatory Authority of India Bill, 2007.

The Cabinet decided to move amendments to the Bill, pending in Lok Sabha since last September, in the coming session of Parliament, Science and Technology Minister Kapil Sibal told reporters in New Delhi.

Once the Bill is approved, it would be notified in three months, a Civil Aviation Ministry spokesperson said.

The Standing Committee had, among several things, recommended that AERA should be empowered to decide on both aeronautical and non-aeronautical services tariffs and the fuel supply infrastructure at airports should be brought under its purview.

Besides, it wanted the authority's functions to cover all airports across the country, irrespective of size or ownership.

The government fully accepted four recommendations of the parliamentary panel and partially accepted two, including the one on fuel infrastructure at airports.

The government decided to partially accept the recommendation regarding inclusion of non-aeronautical revenue in the ambit of the AERA.

While charges relating to core services like landing, parking, communication, navigation and air traffic control were the complete monopoly of the airport operator, the non-core services like office space, car parking, food, etc, denote non-aeronautical services.

The Ministry felt the non-aeronautical services should not be regulated per se, the revenue generated from them "may be taken as a factor relevant for determination of charges", the spokesperson said, adding that this would enable moderation of aeronautical charges through "maximisation of non-aeronautical revenues".

At most of the airports, there were more than one oil firm for supply of aviation turbine fuel (ATF) and they paid a throughput charge to the airport operator at mutually negotiated rates.

Visualising greater competition among the ATF suppliers and optimal utilisation of the fuel supply infrastructure, the Ministry felt that a common supply network was required to be developed at airports.

Like the Telecom Regulatory Authority, the AERA would seek to set quality standards and ensure a level-playing field for all airport operators in the country, including those in the private sector.

The need for a regulator was being increasingly felt as several major airports have gone into private hands. (MORE)

Besides fixing and approving the tariff structure for aeronautical services, the AERA is also expected to monitor pre-set performance standards at all airports in the country.

The draft Bill proposes that the authority would determine tariff structure for aeronautical services, including capital expenditure incurred and timely investment in improvement of airport facilities.

It would also determine the quality of services, improving efficiency, besides taking care of concessions offered by the Centre in any MoU.

The regulator would also determine the amount of development fees for major airports, the passenger service charges to be levied and also monitor the performance standards relating to quality and reliability of services.

It would also have powers to penalise any company or airline or government departments for non-compliance with its orders or directions and other offences.

It is understood that the Bill proposes hefty fines of up to Rs one lakh with provision to double the fine in case of subsequent offences.

The draft says that the authority would comprise of a chairperson and two others, to be appointed by the government, from people who have adequate knowledge and professional experience in aviation, economics, commerce and consumer affairs. The members would be whole-time appointees.

The AERA would also try and promote investments in airports and deal with the level of charges for several aeronautical activities like route navigation facilities, terminal navigation and landing.