People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 08

February 24, 2008


'Closing Existing Airports Violates AERA Bill'

CITU Seeks Level Playing Field For AAI Airports


Dipankar Mukherjee, former MP and secretary of CITU has sent the following letter on February 12, 2008 to the chairman Standing Committee on Transport, Tourism & Culture regarding the Airports Economic Regulatory Authority of India (AERA) Bill, 2007.


The text of the letter is given below:


KINDLY refer to the Airports Economic Regulatory Authority of India (AERA) Bill, 2007 which is now under the consideration of the committee under your chairmanship.


We are constrained to invite the kind attention of the committee to the following extract from the Statement of Objects and Reasons of the Bill, as placed in the parliament.


"As a result of this initiative, greenfield airports are now coming up at Bangalore and Hyderabad in Public-Private-Partnership. A private airport is already fully operational at Cochin. Delhi and Mumbai Airports have also been restructured through the Joint Venture route for modernisation and development. The trends indicate growing competition and requirement of level playing field amongst different categories of airports in future."


In view of the above, it is shocking to note that before the bill is examined by committee and passed by the parliament, the very concept of "Competition" and "Level playing field" as stated in the bill is being defeated by the reported steps being taken for closure of existing Airports of Hyderabad and Bangalore owned by Airports Authority of India (AAI) by March, 2008. This decision, as per our knowledge, is being implemented as a precondition for opening the two new greenfield airports at Hyderabad and Bangalore built by GMR and Siemens-led consortium. Thus, the air travellers in both the cities are being deprived of their choice, in-spite of the fact that they have to traverse much more distance to reach the new airports and also to pay higher user-development fees for the same.


It is being stated by the government that the closure of the AAI-owned airports was a pre-condition for the development of the new airports. If that be so, it goes totally against para 3 of the objects of the AERA Bill, which, specifically stipulates, "In the above background, it is felt that an independent economic regulator, namely, the Airports Economic Regulatory Authority (the Regulatory Authority), may be established so as to create a level playing field and foster healthy competition amongst all major airports to encourage investment in airport facilities to regulate tariffs for aeronautical services etc."


Such an agreement, if any, also violates following provisions of the Competition Act, 2002, which is being reproduced below for your kind perusal.


Prohibition of agreements





3.(1) No enterprise or association of enterprises or person or association of person shall enter into an agreement in respect of production, supply, distribution, storage, acquisition or of goods or provision of services, which causes or likely to cause an appreciable adverse effect on competition within India.



(2) Any agreement entered in contravention of the provisions contained in sub-section (1) shall be void.



In view of the above, we, request the Committee to kindly intervene so that such an executive action of closing the two running airports of AAI nullifying the very objective of AERA Bill, 2007, now under the consideration of the parliament, is stalled with immediate effect, till this action is examined in line with AERA Bill, 2007 read along with the relevant provisions of the Competition Act.


We hope that the Committee would also give suitable recommendations to ensure competition and level playing field between the AAI airports and the private airports and no precondition of closure of a running airport is allowed (with retrospective effect) for building greenfield airports.