"Indian Airport Revamp Race Hots Up"

Wednesday, August 11, 2004

Airport Revamp Race Hots Up  
BY RAJEEV JAYASWAL & JYOTI MUKUL 
India - The Financial Express

 
NEW DELHI, - Indian Gateway Airports (IGA), the DS Construction
(DSC)-led consortium vying for Delhi and Mumbai airports, has decided to
limit foreign equity to 44 per cent, 5 per cent below the FDI cap
permitted by the government. Other contenders Bharti and DLF would be
limiting foreign equity in consortium led by them to 20 per cent and 10
per cent, respectively. 

IGA has furnished details of equity pattern of the consortium to the
financial consultant ABN Amro on Tuesday, said sources. The lead member
will hold a 30 per cent equity in IGA through two group companies, DSC
(20 per cent) and Ebony Retail Holdings (10 per cent). 

FDI will come through Dubai-based Apollo Enterprises which will hold 24
per cent equity. Airport operator Flughafen Munchen Gmbh (FMG) and
UK-based construction company John Laing will hold 10 per cent equity
each. While FMG is the operator of Munich airport, John Laing has
constructed one of the terminals at London Heathrow, Dubai International
Airport and Ashgabat Airport in Turkmenistan. 

In the case of DLF-led consortium, the foreign partner Malaysia Airports
Holdings Berhad (MAHB) is limiting its equity exposure to 10 per cent.
MAHB is the operator of Kuala Lumpur airport. MAHB is also operating
Malaysia's 38 airports which includes five international airports. 

Bharti which has participated in the race as Bharti Changi Airport Ltd
will have 54 per cent equity while its foreign partner Changi Airport
Managers & Partners (Singapore) will hold 20 per cent stake. 

The successful bidder for the airports will form joint ventures with
Airports Authority of India (AAI). The government has stipulated that
the equity of private parties in the proposed joint ventures will be
limited to 74 per cent. AAI along with other public sector undertakings
(PSUs) will hold 26 per cent equity stake. 

ABN-Amro is scrutinising the 10 offers which have come for the
development of airports. It will be submitting its report to the
inter-ministerial group (IMG) on Thursday. 

Other companies which had submitted EoIs for airport modernisation
projects at Mumbai and Delhi include Reliance, Videocon, GMR, Essel and
GVK. 

IMG will short list candidates on the basis of ABN Amro's evaluation of
bidders and then call for technical offers. Final shortlisting will take
place at this stage. It will be followed by financial offers from the
eligible consortia.


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