New Bidding Angers Delhi and Mumbai Airport Sale Advisers

New Bidding Angers Airport Sale Advisers 
Business Standard, India

Published : December 5, 2003 


When the group of ministers on the Delhi and Mumbai airport privatisation first 
met on November 9 to decide on the appointment of a global financial 
consultant, Ernst & Young emerged the lowest bidder with a quote of Rs 2.39 
crore. ABN Amro was the second lowest bidder at Rs 4.49 crore and KPMG quoted 
Rs 6.44 crore. 

Under the selection criterion, the lowest bidder was supposed to be appointed 
the financial consultant. But the GoM had other ideas and instead asked the 
bidders to submit detailed presentations on their technical capabilities. 

At the end of the 10-minute long presentations by the bidders on November 18, 
it was clear that E&Y would not have a smooth ride. For, the GoM liked what ABN 
Amro had to say on its technical expertise in airport privatisation globally. 

Selecting ABN Amro would have meant violating the tender conditions. The GoM, 
at this juncture, referred the entire selection process to the law ministry for 
its opinion. 

On November 30, the law ministry informed the civil aviation ministry that 
legally the lowest bidder could not be rejected under the original terms of the 
tender. The civil aviation ministry then asked for fresh bids for financial 
consultants on December 1, leaving some of the bidders unhappy. 

It will now change the tender conditions to ensure that technical proficiency 
-- and not financial bids -- be the sole criterion now. The fee for the 
financial consultant will be decided by the ministry after affixing the quantum 
of work required to be done. 

A dozen consultants, including Lazard India, PricewaterhouseCoopers, ANZ 
Grindlays and Tata Economic Consultancy had submitted Expressions of Interest 
for the project on October 20, of which five firms, including KPMG, ABN Amro, 
Ernst & Young, TEC and PricewaterhouseCoopers, were selected. 

The final three were selected on the basis of the evaluation of the technical 
presentations made by the consultants to the civil aviation ministry and 
Airports Authority of India. 
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