The Union government has asked the eight pre-qualified bidders for the modernisation of the Mumbai and Dehli airports to submit their technical and financial bids by 14 September 2005.

The government, having handed over the transaction documents to the bidders on 30 August 2005, is now hopeful of awarding contracts for both the airports by end-2005.

The modernisation project will be executed by a joint venture in which Airports Authority of India and public sector undertakings will hold 26 per cent stake. The remaining share will be with the private sector. The Government has placed a cap of 10 per cent on the equity that a scheduled airline can hold in the project, while foreign airlines have been barred from picking any equity.

The joint venture company will have the right to operate, maintain, develop, design, construct, upgrade, modernise, finance and manage the airport. Initially, the agreement will be for 30 years, extendable by another 30 years. The government has stipulated an authorized capital of Rs.250 crore for the joint venture company with initial equity subscription pegged at Rs.200 crore.

The transaction document has mandated certain capital expenditure that the successful bidder must undertake at the two airports. In the case of Delhi, the successful bidder must ensure that during the first five years a second runway is constructed, the terminal building is expanded and parking bays are added for aircraft. The Government has fixed the mandated capital expenditure during the first five years at Rs.2,600 crore for Mumbai airport and at Rs.2,800 crore for Delhi airport.

The eight entities participating in the modernisation process include Bharti Enterprises, Piramal Holdings Ltd, GMR Infrastructure Ltd, GVK Industries, DS Construction Ltd, Starlite Infrastructure Ltd, Pan India Paryatan Ltd and Reliance Airport Developers Pvt Ltd.

Also See:

Mumbai-Delhi airport modernisation: Transaction documents soon (25-Aug-05)

mumdel2