Airport privatisation stretched

Deadline for choosing jv partners for delhi, mumbai airport modernisation extended

The government has decided to extend the deadline for finalising the joint venture partners for the privatisation and modernisation of the Delhi and Mumbai airports by another six months.

According to sources in the ministry of civil aviation, the new deadline has been set for June 2005 instead of December this year as planned earlier.

As per the new time table set by the government, the first round of shortlisting of bidders will be completed by November 2004. After this, the shortlisted companies will be asked to submit the financial and technical bids.

"Subsequent to this, the final partner will be decided and the agreement will be signed by June 2005," said a senior government official.

Ten consortiums, including Reliance, Videocon and DLF, had expressed interest to bid for the 74 per cent stake in the joint venture companies, in which the Airports Authority of India will hold a 26 per cent stake.

Companies are also lining up investments to the tune of Rs 5,000 crore to modernise the airports. Once the joint venture agreement is signed, the government will allow the joint venture partner to take loans from Indian financial institutions.

Currently, the interministerial group set up for airport privatisation is examinigng the expression of interest submitted by various companies.

Besides, the government has also directed ABN AMRO Bank, the financial advisor to the government in privatising the two airports, to examine the bids and come back with its recommendations in a week's time.

Civil aviation ministry sources also said that the financial advisor has been directed to examine the record of the companies in handling and managing the airports. As per the norms prescribed, the airport partners in the consortiums will have to have a consistent track record in managing airports.

However, the modernisation of the airports will not just limited to the two metro airports of Delghi and Mumbai. The government wants to modernise two other metro airports -- Chennai and Kolkotta.

However, the modalities for this are yet to be finalised. The civil aviation ministry has also firmed up a Rs 5,000-crore modernisation plan for 20 non-metro airports. Amongst the four metro airports, the process to modernise Delhi and Mumbai have been set in motion, while Chennai and Kolkota are the next targets.

The government is also in the process of developing new airports in Bangalore and Hyderabad in partnership with private sector.

The ministry plans to seek loans from the Rs 40,000-crore corpus being created by the inter-institutional group (IIG). The Airports Authority of India (AAI) would float bonds for serving the proposed loan.

The airports under consideration of the government include Jaipur, Udaipur, Lucknow, Bhubaneswar, Trivandrum amongst others. As per the plans of the government the infrastructure in these airports will be upgraded to international levels.