Today in New Delhi, India
Oct 18, 2018-Thursday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

GMR takes Delhi, GVK gets Mumbai

The consortiums of GMR-Fraport and GVK-ACSA won the contracts for the Delhi and Mumbai airports respectively. This would take the two cities a step closer to the dream of world-class airports. Although GMR was the second highest in terms of financial bids at both the airports, the government gave it the first chance to select the airport of its choice -- because it was the only bidder to score over 80 marks in the technical bids -- provided it matched the highest bid.

india Updated: Feb 01, 2006 01:35 IST

The consortiums of GMR-Fraport and GVK-ACSA won the contracts for the Delhi and Mumbai airports respectively. This would take the two cities a step closer to the dream of world-class airports.

Although GMR was the second highest in terms of financial bids at both the airports, the government gave it the first chance to select the airport of its choice -- because it was the only bidder to score over 80 marks in the technical bids -- provided it matched the highest bid.

GMR, which had offered to share 43.65 per cent of the revenue for Delhi, matched the highest bidder's (Reliance) 45.99 per cent. For Mumbai, GVK was the highest bidder with 38.70 per cent. The second highest bidder was GMR at 33.03 per cent.

Announcing the winners after the decision was endorsed by the empowered Group of Ministers (eGoM), Civil Aviation Minister Praful Patel said the cabinet would give the final approval on Wednesday.

"The transfer exercise for both the airports will be completed in two months -- by March 31," said Patel.

Asked if GVK-ACSA was capable of developing world-class airports -- the consortium had scored only 59.3 marks in development capability -- Patel said there was no way out, since all the bidders other than GMR had scored less than 80. "Some compromises have to be made if you want to complete the exercise on time," he said.

On the legal tenability of the process, since the request for proposal (RFP) was changed midway, Patel said there was a provision in the RFP and the opinion of the eGoM's legal advisers was also taken.

“The government has taken the decision in its wisdom and we will see what’ll happen,” he said.

In a statement, a Reliance spokesperson said there was no provision in the RFP or the tender conditions to give any bidder an option to match the highest bid — that too selectively, for only one airport.

“These last-minute changes are a complete violation of the RFP,” he said. “We were advised these changes are a complete departure from the tender conditions, and are untenable and unconstitutional.”

In an interview to NDTV, the minister denied there was any mid-course change of rules. Asked about Sterlite’s claim that its financial bid was the highest in Mumbai but wasn’t opened, Patel said, “We've selected the best four for each of the airports.”

Under the terms of agreement, 60 per cent employees at both airports will be absorbed by the new joint ventures, in which the Airports Authority of India (AAI) will have 26 per cent stake. The balance 74 per cent stake in the Delhi JV will be owned by GMR-Fraport. In Mumbai, GVK-ACSA will hold 74 per cent.

Each of the joint venture partners will deposit Rs 150 crore as security for three year revenues. That means, in case of Delhi, the JV will share 45.99 per cent of the revenues with the AAI; in case it fails to do so, the AAI can encash the security deposits.

In the first phase of the development, GMR-Fraport is expected to make an investment of around Rs 2,800 crore, which is mandated under the bid condition. Similarly, GVK-ACSA will make a capital expenditure of around Rs 2,600 crore in Mumbai.

First Published: Feb 01, 2006 01:34 IST