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Amendment Bill on Multiple Airports Under PPP Gets Green Signal from Parliamentary Panel

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A parliamentary committee has given the inexperienced sign to an modification invoice that in a big change will allow the federal government to supply smaller airports together with a bigger one as a package deal for Public Private Partnership (PPP).

“The Committee realises the huge demand for more airports in the country. The Committee recognises the fact that it is not feasible for Airports Authority of India (AAI) to meet the investment requirements to develop and maintain all the airports in the country. The Committee appreciates the inevitable need for PPP in the development and maintenance of smaller and unprofitable airports,” says the report of the department-related Parliamentary Standing Committee on Transport, Tourism and Culture, which was tabled in Parliament on Thursday.

AAI had awarded six airports, Ahmedabad, Lucknow, Mangaluru, Trivandrum, Guwahati and Jaipur, for operations, administration and growth underneath PPP in 2019. Further, AAI Board on September 5, 2019 authorized leasing of one other six airports in Bhubaneshwar, Varanasi, Amritsar, Raipur, Indore and Trichy for enterprise operations, administration and growth via PPP. The concept behind the Airports Economic Regulatory Authority of India (Amendment) Bill, 2021 is to membership every of those airports with close by smaller airports for the aim of joint growth within the PPP mode.

“The clubbing or pairing of smaller or non-profitable airports with profitable airports, as a package to bidder or investors for next phase of PPP of Airports would ensure integrated development of smaller and non-profitable airports with profitable airports. Further, smaller airports would also be developed faster through professional efficiency of private operators,” the federal government defined earlier than the committee.

The Civil Aviation Secretary informed the parliamentary committee that by clubbing small airports with viable airports, “it will be possible for any private partner to bid for the combination of airports as both put together will become viable; otherwise, these small airports will never get into PPP mode.”

The Secretary additional stated this is able to facilitate growth of each excessive visitors quantity and low visitors quantity airports collectively in a holistic method and smaller airports can be developed quicker via skilled effectivity of privatization. “It would also create scale of operations, making it an attractive proposition and elicit better response from bidders or investors. Pairing of airports is expected to enhance negotiation capacity of airport operators with the airlines for commercialization and route optimization and generation of non-aero revenue and lead to improved connectivity to the smaller cities and nearby areas realizing the goal of Atma Nirbhar Bharat,” the Secretary informed the committee.

The modification invoice would amend current provisions of AERA by redefining a “major airport” as current regulation doesn’t present for the willpower of tariffs for aeronautical providers for a gaggle of airports collectively. The modification will insert an enabling provision within the AERA Act for tariff willpower of a ‘group of airports’.

“The Committee appreciates the reasons furnished by the Ministry for introducing the instant Bill, since the proposed change in the definition of the term ‘major airport’ to include a ‘group of airports’ would, in effect, enable simultaneous development of smaller and unprofitable airports, along with the major airports, in an integrated way. The Committee is of the view that the Bill is needed to address the significant and continuous investment requirements in the airport infrastructure for upgradation or expansion of capacity and modernization of processes and systems in an equitable manner to ensure that the growth in air traffic is managed efficiently. Therefore, the Committee adopts the Bill without any changes,” the committee report says.

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