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Earlier this week, Rajya Sabha passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019, and the Bill is now pending in Lok Sabha.  The Bill amends the Airports Economic Regulatory Authority of India Act, 2008.  The Act established the Airports Economic Regulatory Authority of India (AERA).  AERA regulates tariffs and other charges for aeronautical services provided at civilian airports with annual traffic above 15 lakh passengers.  It also monitors the performance standard of services across these airports.  In this post, we explain the amendments that the Bill seeks to bring in and some of the issues around the functioning of the regulator.

Why was AERA created, and what is its role?

Few years back, private players started operating civilian airports.  Typically, airports run the risk of becoming a monopoly because cities usually have one civilian airport which controls all aeronautical services in that area.  To ensure that private airport operators do not misuse their monopoly, the need for an independent tariff regulator in the airport sector was felt.  Consequently, the Airports Economic Regulatory Authority of India Act, 2008 (AERA Act) was passed which set up AERA. 

AERA regulates tariffs and other charges (development fee and passenger service fee) for aeronautical services (air traffic management, landing and parking of aircraft, ground handling services) at major airports.  Major airports include civilian airports with annual traffic above 15 lakh passengers.  In 2018-19, there were 32 such airports (see Table 1).  As of June 2019, 27 of these are being regulated by AERA (AERA also regulates tariffs at the Kannur airport which was used by 89,127 passengers in 2018-19).  For the remaining airports, tariffs are determined by the Airports Authority of India (AAI), which is a body under the Ministry of Civil Aviation that also operates airports. 

What changes are being proposed in the Bill?

The Bill seeks to do two things:

Definition of major airports:  Currently, the AERA Act defines a major airport as one with annual passenger traffic over 15 lakh, or any other airports as notified by the central government.  The Bill increases the threshold of annual passenger traffic for major airports to over 35 lakh. 

Tariff determination by AERA:  Under the Act, AERA is responsible for determining the: (i) tariff for aeronautical services every five years, (ii) development fees, and (iii) passengers service fee.  It can also amend the tariffs in the interim period.  The Bill adds that AERA will not determine: (i) tariff, (ii) tariff structures, or (iii) development fees, in certain cases.  These cases include those where such tariff amounts were a part of the bid document on the basis of which the airport operations were awarded.  AERA will be consulted (by the concessioning authority, the Ministry of Civil Aviation) before incorporating such tariffs in the bid document, and such tariffs must be notified.

Why is the Act getting amended?

The Statement of Objects and Reasons of the Bill states that the exponential growth of the sector has put tremendous pressure on AERA, while its resources are limited.  Therefore, if too many airports come under the purview of AERA, it will not be able to perform its functions efficiently.  If the challenge for AERA is availability of limited resources, the question is whether this problem may be resolved by reducing its jurisdiction (as the Bill is doing), or by improving its capacity. 

Will the proposed amendments strengthen the role of the regulator?

When AERA was created in 2008, there were 11 airports with annual passenger traffic over 15 lakh.  With increase in passenger traffic across airports, currently 32 airports are above this threshold.  The Bill increases the threshold of annual passenger traffic for major airports to over 35 lakh.  With this increase in threshold, 16 airports will be regulated by AERA.  It may be argued that instead of strengthening the role of the regulator, its purview is being reduced. 

Before AERA was set up, the Airports Authority of India (AAI) fixed the aeronautical charges for the airports under its control and prescribed performance standards for all airports and monitored them.  Various committees had noted that AAI performed the role of airport operator as well as the regulator, which resulted in conflict of interest.  Further, there was a natural monopoly in airports and air traffic control.  In order to regulate the growing competition in the airline industry, and to provide a level playing field among different categories of airports, AERA was set up.  During the deliberations of the Standing Committee examining the AERA Bill, 2007, the Ministry of Civil Aviation had noted that AERA should regulate tariff and monitor performance standards only at major airports.  Depending upon future developments in the sector, other functions could be subsequently assigned to the regulator.

How would the Bill affect the regulatory regime?

Currently, there are 32 major airports (annual traffic above 15 lakh), and AERA regulates tariffs at 27 of these.  As per the Bill, AERA will regulate 16 major airports (annual traffic above 35 lakh).  The remaining 16 airports will be regulated by AAI.  Till 2030-31, air traffic in the country is expected to grow at an average annual rate of 10-11%.  This implies that in a few years, the traffic at the other 16 airports will increase to over 35 lakh and they will again fall under the purview of AERA.  This may lead to constant changes in the regulatory regime at these airports.  The table below provides the current list of major airports:

Table 1: List of major airports in India (as on March 2019) 

Airports with annual traffic above 35 lakh Airports with annual traffic between 15 and 35 lakh

Ahmedabad

Goa

Mumbai

Amritsar

Madurai*

Srinagar

Bengaluru

Guwahati

Patna

Bagdogra

Mangalore

Trichy*

Bhubaneswar

Hyderabad

Pune

Calicut

Nagpur

Varanasi

Chennai

Jaipur

Thiruvananthapuram

Chandigarh

Port Blair*

Vishakhapatnam

Cochin

Kolkata

 

Coimbatore

Raipur*

 

Delhi

Lucknow

 

Indore

Ranchi*

 

* - AERA does not regulate tariffs at these airports currently. 

Sources: AAI Traffic News; AERA website; PRS.

As of April 26, Rajasthan has 2,083 confirmed cases of COVID-19 (fifth highest in the country), of which 493 have recovered and 33 have died.  On March 18, the Rajasthan government had declared a state-wide curfew till March 31, to check the spread of the disease.  A nation-wide lockdown has also been in place since March 25 and is currently, extended up to May 3.  The state has announced several policy decisions to prevent the spread of the virus and provide relief for those affected by it.  This blog summarises the key policy measures taken by the Government of Rajasthan in response to the COVID-19 pandemic.

Early measures for containment

Between late January and early February, Rajasthan Government’s measures were aimed towards identification, screening and testing, and constant monitoring of passenger arrivals from China.  Instructions were also issued to district health officials for various prevention, treatment, & control related activities, such as (i) mandatory 28-day home isolation for all travellers from China, (ii) running awareness campaigns, and (iii) ensuring adequate supplies of Personal Protection Equipments (PPEs).  Some of the other measures, taken prior to the state-wide lockdown, are summarised below:

Administrative measures

  • The government announced the formation of Rapid Response Teams (RRTs), at the medical college-level and at district-level on March 3 and 5, respectively.

  • The District Collector was appointed as the Nodal Officer for all COVID-19 containment activities.  Control Rooms were to be opened at all Sub-divisional offices.  The concerned officers were also directed to strengthen information dissemination mechanisms and tackle the menace of fake news.

  • Directives were issued on March 11 to rural health workers/officials to report for duty on Gazetted holidays.  Further, government departments were shut down between March 22 and March 31.  Only essential departments such as Health Services were allowed to function on a rotation basis at 50% capacity and special / emergency leaves were permitted. 

Travel and Movement

Health Measures

  • Advisories regarding prevention and control measures were issued to: (i) District Collectors, regarding sample collection and transportation, hotels, and preparedness of hospitals, (ii) Police department, to stop using breath analysers, (iii) Private hospitals, regarding preparedness and monitoring activities, and (iv) Temple trusts, to disinfect their premises with chemicals. 

  • The government issued Standard Operating Procedures for conducting mock drills in emergency response handling of COVID-19 cases.  Training and capacity building measures were also initiated for (i) Railways, Army personnel etc and (ii) ASHA workers, through video conferencing. 

  • A model micro-plan for containing local transmission of COVID was released.  Key features of the plan include: (i) identification and mapping of affected areas, (ii) activities for prevention control, surveillance, and contact tracing, (iii) human resource management, including roles and responsibilities, (iv) various infrastructural and logistical support, such as hospitals, labs etc, and (v) communication and data management.

  • Resource Management: Private hospitals and medical colleges were instructed to reserve 25 % of beds for COVID-19 patients.  They were also instructed to utilise faculty from the departments of Preventive and Social Medicine to conduct health education and awareness activities. 

  • Over 6000 Students of nursing schools were employed in assisting the health department to conduct screening activities being conducted at public places, railways stations, bus stands etc.

  • Further, the government issued guidelines to ensure the rational use of PPEs.

Welfare Measures

During the lockdown

State-wide curfew announced on March 18 has been followed by a nation-wide lockdown between March 25 and May 3. However, certain relaxations have been recommended by the state government from April 21 onwards.  Some of the key measures undertaken during the lockdown period are: 

Administrative Measures

  • Advisory groups and task forces were set up on – (i) COVID-19 prevention, (ii) Health and Economy, and (iii) Higher education.  These groups will provide advice on the way forward for (i) prevention and containment activities, (ii) post-lockdown strategies and strategies to revive the economy, and (iii) to address the challenges facing the higher education sector respectively. 

  • Services of retiring medical and paramedical professionals retiring between March and August have been extended till September 2020. 

Essential Goods and Services

  • A Drug Supply Control Room was set up at the Rajasthan Pharmacy Council.  This is to ensure uninterrupted supply of medicines during the lockdown and will also assist in facilitating home delivery of medicines.

  • The government permitted Fair Price Shops to sell products such as masalas, sanitisers, and hygiene products, in addition to food grains.

  • Village service cooperatives were declared as secondary markets to facilitate farmers to sell their produce near their own fields/villages during the lockdown. 

  • A Whatsapp helpline was also set up for complaints regarding hoarding, black marketing, and overpricing.

Travel and Movement

  • Once lockdown was in place, the government issued instructions to identify, screen, and categorise people from other states who have travelled to Rajasthan.  They were to be categorised into: (i) people displaying symptoms to be put in isolation wards, (ii) people over 60 years of age with symptoms and co-morbidities to be put in quarantine centres, and (iii) asymptomatic people to be home quarantined.

  • On March 28, the government announced the availability of buses to transport people during the lockdown.  Further, stranded students in Kota were allowed to return to their respective states. 

  • On April 2, a portal and a helpline were launched to help stranded foreign tourists and NRIs.

  • On April 11, an e-pass facility was launched for movement of people and vehicles. 

Health Measures

  • To identify COVID-19 patients, district officials were instructed to monitor people with ARI/URI/Pneumonia or other breathing difficulties coming into hospital OPDs.  Pharmacists were also instructed to not issue medicines for cold/cough without prescriptions. 

  • A mobile app – Raj COVID Info – was developed by the government for tracking of quarantined people.  Quarantined persons are required to send their selfie clicks at regular intervals, failing which a notification would be sent by the app.  The app also provides a lot of information on COVID-19, such as the number of cases, and press releases by the government.

  • Due to the lockdown, people had restricted access to hospitals and treatment.  Thus, instructions were issued to utilise Mobile Medical Vans for treatment/screening and also as mobile OPDs

  • On April 20, a detailed action plan for prevention and control of COVID-19 was released.  The report recommended: (i) preparation of a containment plan, (ii) formation of RRTs, (iii) testing protocols, (iv) setting up of control room and helpline, (v) designated quarantine centres and COVID-19 hospitals, (vi) roles and responsibilities, and (vii) other logistics. 

Welfare Measures

  • The government issued instructions to make medicines available free of cost to senior citizens and other patients with chronic illnesses through the Chief Minister’s Free Medicine Scheme.  

  • Rs 60 crore was allotted to Panchayati Raj Institutions to purchase PPEs and for other prevention activities. 

  • A one-time cash transfer of Rs 1000 to over 15 lakh construction workers was announced.  Similar cash transfer of Rs 1000 was announced for poor people who were deprived of livelihood during the lockdown, particularly those people with no social security benefits.  Eligible families would be selected through the Aadhaar database.  Further, an additional cash transfer of Rs 1500 to needy eligible families from different categories was announced.

  • The state also announced an aid of Rs 50 lakh to the families of frontline workers who lose their lives due to COVID-19.

  • To maintain social distancing, the government will conduct a door-to-door distribution of ration to select beneficiaries in rural areas of the state.  The government also announced the distribution of free wheat for April, May, and June, under the National Food Security Act, 2013.  Ration will also be distributed to stranded migrant families from Pakistan, living in the state.

  • The government announced free tractor & farming equipment on rent in tie-up with farming equipment manufacturers to assist economically weak small & marginal farmers.

Other Measures

  • Education: Project SMILE was launched to connect students and teachers online during the lockdown.  Study material would be sent through specially formed Whatsapp groups.  For each subject, 30-40 minute content videos have been prepared by the Education Department.

  • Industry:  On April 18, new guidelines were issued for industries and enterprises to resume operations from April 20 onwards.  Industries located in rural areas or export units / SEZs in municipal areas where accommodation facilities for workers are present, are allowed to function.  Factories have been permitted to increase the working hours from 8 hours to 12 hours per day, to reduce the requirement of workers in factories.  This exemption has been allowed for the next three months for factories operating at 60% to 65% of manpower capacity.

For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.