Airports upgrade to be delayed

Bidders to get more time to submit their offers

The ambitious project for privatising and modernising the Delhi and Mumbai airports may be delayed as the government is considering to give private bidders more time to submit their bids. As per the original plan, the deadline for submitting the bids is June 24, 2005.

Various options regarding an extension of the deadline were discussed at a meeting of an empowered group of ministers (EGoM), set up for the project, in New Delhi yesterday.

But no concrete decisions were taken and another meeting of the EGoM would be held early next week to finalise the course of action, officials said.

One of the reasons that prompted the government to consider extending the deadline is that some bidders are yet to finalise who their consortium partners will be. Besides, the bidders have also sought certain clarifications from the government on the bid documents.

Also, companies have expressed their apprehensions about certain bidding conditions, including the provision of deciding the highest bidder on the basis of the percentage revenue share offered.

Bidders have been urging the government for changing this condition and replacing it with a model where the highest bidder gets the airports.

Sources said the bidders had also been informed by the government of the possibility of an extension of the deadline.

Sources also said advisers to the government on the privatisation process had been asked to recommend steps that needed to be taken to extend the deadline.

The civil aviation ministry's preliminary assessment has estimated that modernisation of the Delhi and Mumbai airports will require investments of Rs 15,120 crore. While the project cost for the Delhi airport will be about Rs 8,720 crore, it will be Rs 6,400 crore for the Mumbai airport.

The two airports are being modernised and restructured through the joint venture route, with Airports Authority of India (AAI) holding 26 per cent equity in the venture and the balance 74 per cent by the private sector partner.

Seven consortiums, led by Reliance, Bharti, Essel, L&T, GMR Group, GVK Group, Macquire Bank and DS Constriction, have been shortlisted for bidding for the two airports.

From the original list of nine, two bidders "" the consortiums led by Videocon and DLF "" had backed out of the bidding process. DLF had joined hands with the Bharti consortium to take part in the bidding.