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The Airports Economic Regulatory Authority of India decides on the tariffs at several airports and any delay in appointing its chief could mean a consequent delay in deciding on airport charges. Photo: Bloomberg
The Airports Economic Regulatory Authority of India decides on the tariffs at several airports and any delay in appointing its chief could mean a consequent delay in deciding on airport charges. Photo: Bloomberg

Aviation ministry awaits PMO nod on shortlisted candidates

Ministry shortlists Bharat Bhushan, S. Machendranathan to head Airports Economic Regulatory Authority

New Delhi: The aviation ministry has shortlisted two bureaucrats to potentially head the country’s airports regulator but a final decision has to be made by the Prime Minister’s Office, which recently overruled extending the tenure of Air India’s current chairman.

The Airports Economic Regulatory Authority of India, or Aera, decides on the tariffs at several airports and any delay in appointing its chief could mean a consequent delay in deciding on the airport charges. The last chairman of the regulator, Yashwant Bhave, retired in July.

The aviation ministry has shortlisted two candidates: chief secretary of Kerala Bharat Bhushan and S. Machendranathan, who serves as the secretary (coordination and public grievances) in the Cabinet Secretariat of India.

Bhushan, an IAS officer, belongs to the Kerala cadre and Machendranathan, also an IAS officer, belongs to the Tamil Nadu cadre.

“The names have been sent for approval," said a government official who asked not to be identified.

It could take up to three weeks for approval to come through.

Bhushan, a former director general of civil aviation, was transferred after a major showdown between him and the aviation ministry headed by Ajit Singh in 2012.

Bhushan had indicated he planned to suspend Kingfisher Airlines Ltd’s licence after a financial and safety audit.

The official quoted above said the Department of Personnel and Training (DoPT), overseen by the Prime Minister’s Office, and which makes key appointments had asked for clarifications on the status of the complaint Bhushan had made on his removal. Bhushan had written a long letter to the cabinet secretary claiming that important papers related to an impending suspension of Kingfisher had been removed from his file.

The official said the case was dead and that the ministry had told DoPT as much.

The DoPT’s desire to know more about that case and the fact that Bhushan’s interview for Aera chief went for the longest duration were seen as indications that he was ahead in the race, a second government official said.

Machendranathan served the aviation ministry as financial advisor in 2013.

To be sure, DoPT could say no to both candidates.

Prime Minister Narendra Modi recently shot down a proposal to extend Air India chairman Rohit Nandan’s tenure by two years and said a new chairman has to be found within three months.

The new Aera chief will oversee passenger and airline levies and effectively decide on the viability of over $5 billion that will be spent on airport projects over the next five years.

The Comptroller and Auditor General of India, or CAG, the government auditor, has come down hard in its reports on Delhi and Mumbai airports in the last three years, accusing the aviation ministry of being partial to the two airports.

The ministry and airports led by GMR Infrastructure Ltd and GVK Power and Infrastructure Ltd had denied any wrongdoing.

“The first round of investments (in airports) is over, the new chairperson will enter at a crucial time when the second round of investments starts," said Amrit Pandurangi, senior director at consulting firm Deloitte Touche Tohmatsu India Pvt. Ltd. “Balancing airport investors’ interests versus a troubled airline industry is going to be a challenge for the new incumbent."

Former Airports Authority of India (AAI) board member Robey Lal said the job will entail looking at issues such as gold-plating or inflating the cost of projects aimed at persuading the regulator to agree to higher tariffs.

Both Lal and Pandurangi said a new Aera chief should be appointed fast.

“The next wave of private investment has to start so right signals have to be given," Pandurangi said. “The next person should come in very quickly."

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