'Go by evaluation panel's view on airport bids'

Finmin says re-bidding will violate sanctity of process and be open to challenge.

Taking a tough stand against the clamour for re-bidding in the privatisation and modernisation of the Delhi and Mumbai airports, the finance ministry has favoured going ahead with the evaluation committee's findings.

In fact, the ministry has gone to the extent of telling the inter-ministerial group (IMG) on the project that the whole process should be scrapped, rather than re-bidding be called.

Going by the finance ministry's written communication to the civil aviation ministry, it appears that the consortiums led by the GMR group and Anil Dhirubhai Ambani Enterprises have emerged the two top bidders.

The Airports Authority of India and the Planning Commission's representative on the IMG have called for fresh bidding, while the Left parties remain opposed to the project.

AAI Chairman K Ramalingam and its member finance, VDV Prasad Rao, had given a dissent note stating that it would be in the "overall interest of ensuring transparency and competitiveness in the whole bidding process to call for fresh technical and financial bids from the eight pre-qualified bidders."

However, the finance ministry, in a note giving its views to be incorporated in the final draft of the IMG report, has said: "It was not possible to ask the bidders to re-bid."

It would violate the sanctity of the bidding process and would be open to challenge," he added.

Based on available information, the finance ministry has said, "The IMG could recommend scrapping of the tender and carrying out the exercise de-novo." It, however, acknowledged that this could delay the entire process by a year.

The other option, according to the finance ministry, was to recommend the case of GMR (one of the bidders) only. However, this would mean that one airport will have to go without a bid as the same consortium could not be given both the airports.

Thus, "the overall balance of convenience," in the finance ministry's view, lies in endorsing the recommendations of the evaluation committee.

The evaluation committee was set up by the government to evaluate the technical bids submitted by the bidders. Headed by an additional secretary in the civil aviation ministry, it was assisted by the government's technical advisor, Air Plan of Australia.

On December 5 last year, an empowered group of ministers on airport privatisation had said that the IMG should undertake an independent review of the evaluation conducted by the consultants and that no change should be made in the evaluation criteria stipulated in the request for proposal documents.

The consultants were asked to adhere to the RFP document and award marks again. However, the IMG found that even after adhering to the letter of the RFP document, the deviation in the overall marking was insignificant and did not alter the ranking of the bidders.

"The detailed evaluation indicates that none of the bidders evaluated as below the cut-off level could be re-evaluated so that he (sic) crosses the qualifying mark. Doing so would stretch the limits of credibility," the finance ministry's note said.

Earlier, reservations had been expressed from various quarters against the privatisation project on the ground that ABN Amro, the financial advisor, had business relations with some bidders. However, the finance ministry arrived at the conclusion that there was no conflict of interest.

FINANCE MINISTRY'S VIEW

Re-bidding will violate the sanctity of the process and be open to challenge

The IMG could recommend scrapping of the tender; this will cause a year's delay

The IMG could recommend GMR only, but that'll leave one airport without a bid

In the overall balance of convenience, the IMG should endorse the evaluation committee's recommendations