Indian Government Rider to Mumbai, Delhi Airport Privatisation

March 1, 2004

Indian Government Rider to Mumbai, Delhi Airport
Privatisation 
Rediff, India

The Centre has made it mandatory for consortia bidding
for the privatisation of Mumbai and Delhi airports to
include an airport operator. 

Further, the government has said additional weightage
will be given to those companies in which airport
operators have a minimum stake of 10 per cent. 

"Each prospective bidder must be an airport operator
or have at least one airport operator in its
consortium. Airport operators will be required, at the
least to enter into a service performance contract
acceptable to the Airports Authority of India. 

"Additional weightage will be given to prospective
bidders with airport operators proposing to hold
equity of no less than 10 per cent in the joint
venture company," a clause in the document inviting
expressions of interest says. 

The government is planning to privatise the two
airports through joint venture companies in which
private parties will hold 74 per cent each. The
balance 26 per cent stake will be held by the AAI and
other public sector undertakings. 

The last date for submitting expressions of intent is
June 4, 2004 and the government plans to complete the
privatisation by October 2004. "We welcome the attempt
to privatise these airports and are sure that this
process will set the benchmarks for future airport
privatisation in India," said Athar Shahab, the
transport sector head with the Infrastructure
Development Finance Company, which is a prospective
financier to the two airports. 

The government has also said while the same company
can bid for both airports, they will be eventually
given only one airport to manage. 

This is important as the two airports together
accounted for 49 per cent of passenger traffic and 59
per cent of cargo traffic handled by airports in India
in 2002-03. 

ABN Amro are the financial consultants, while
Amarchand & Mangaldas and Suresh A Shroff are the
legal consultants to AAI for the privatisation. 
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