Financial bids opening today

Published on Jan 31, 2006 01:28 AM IST

STRIKE OR no strike, the Civil Aviation Ministry will open the bids for the modernisation of the Delhi and Mumbai airports at 3.30 p.m. on Tuesday. Civil Aviation Secretary Ajay Prasad told HT: "We are going ahead with the opening of the bids. All the qualified bidders have been informed to be present.

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HT Image
None | By, New Delhi

STRIKE OR no strike, the Civil Aviation Ministry will open the bids for the modernisation of the Delhi and Mumbai airports at 3.30 p.m. on Tuesday.

Civil Aviation Secretary Ajay Prasad told HT: "We are going ahead with the opening of the bids. All the qualified bidders have been informed to be present.

We have not received any official intimation from the Employees Joint Forum regarding any industrial action, but I guess there will be some sort of action."

Prasad said the eGoM-appointed committee headed by AAI member (finance) V.D.V. Prasad Rao will open the bids and there was no going back on that. After the bids are opened, the eGoM will meet in the evening to evaluate the result and may take it further to the cabinet before making a final announcement.

While the ministry may be concerned over changing the RFP (request for proposal) midway, the way forward appears to be giving GMR the choice to select between Delhi and Mumbai airports, as also to match the highest bid from among the four selected bidders (other three bidders are Reliance, DS and GVK).

For instance, if the highest bid is from B, C or D, then GMR — which is A as per the Committee of Secretaries recommendation — will be given the first right of refusal to match the highest bid.

For Mumbai airport, Reliance, DS and GVK will fight on "equal terms" throwing the global technical advisor Airplan's original recommendations to the wind. It is believed GVK has the highest financial bid for Mumbai, though it received the lowest technical marks (59).

The bids are extremely aggressive with the highest (H1) for Delhi upward of 40 per cent of revenue while the Mumbai bid is around 35 per cent. The way it works is that 40-45 per cent of the total revenue will accrue to the AAI as part of the revenue-sharing terms under the commercial bid stipulations. This is above the 26 per cent equity partnership that AAI will have in the joint venture (JV) that builds out the new airports in tandem with the private sector consortia.

In another significant development, the International Airports Authority of India Officers Association moved the SC against a Delhi HC verdict dismissing its petition challenging the government's decision to allow 74 per cent private equity in JV for modernisation. In an SLP, it stated that the HC erred in holding that the government could allow 74 per cent private equity in JVs under section 12 (3) of the AAI Act 1994 through an executive order.

 

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  • ABOUT THE AUTHOR

    Arun Kumar is Senior Assistant Editor with Hindustan Times. He has spent two-and-half decades covering Bihar, including politics, educational and social issues.

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