GMR bags Delhi airport, GVK Mumbai

The government today ended three-and-a-half years of uncertainty by deciding to award the contracts for modernising the Delhi and Mumbai airports to consortia led by Hyderabad-based GMR and GVK, respectively.

An empowered group of ministers (EGoM), set up for the airports project, took the decision here after the evaluation of financial bids by an inter-ministerial group. The financial bids consisted primarily of the share of revenue offered to the government.

In choosing the winners today, the government also met its much-avowed deadline of January 31.

The EGoM's decision will be submitted to the Cabinet tomorrow, which is unlikely to overrule it. The GMR-Fraport consortium emerged the second highest bidder in the financial evaluation for the Delhi airport.

But, as this consortium was the only one to qualify on technical parameters, it was given the option to match the highest financial bid for the airport of its choice.

It chose Delhi and agreed to match the highest bid for the airport, by Reliance-ASA, which offered to share 46 per cent of revenue with the government. GMR's original bid was 43.6 per cent. For Mumbai, GVK, promoted by the Reddys, emerged the top bidder, offering to share 38 per cent revenue.

Those that had lost out began alleging that tender conditions were flouted. Some are believed to be writing protest letters to the prime minister.

The main contention can be the EGoM's decision at its last meeting to broaden competition and by taking into account the financial bids of all aspirants that had fetched 50 per cent or more marks in technical evaluation.

However, Amarchand Mangaldas, the government's legal adviser, believes all will be well. "The government has looked at its options. The decision was not taken just like that," said Pallavi Shroff, a partner with the firm.