Financial Daily from THE HINDU group of publications
Friday, Sep 12, 2003
Financial Daily from THE HINDU group of publications Friday, Sep 12, 2003 |
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Infrastructure Logistics - Airlines Cabinet gives nod for Delhi, Mumbai airports revamp Our Bureau
New Delhi , Sept. 11 THE long-delayed proposal for the modernisation of the New Delhi and Mumbai airports got the green signal from the Union Cabinet on Thursday. The two airports will be transformed into world-class entities through the joint venture route, with 74 per cent participation by the private party and 24 per cent to be held by the Airports Authority of India (AAI) and other Government entities. The two airport projects are to be implemented simultaneously although different partners will be selected for each. The Government proposes to give the two airports on concession to the joint venture partner for a period of 30 years, with a provision to extend it by another 30 years. Speaking to newspersons after the Cabinet meeting, the Union Minister for Civil Aviation, Mr Rajiv Pratap Rudy, said that a committee of Ministers comprising, among others, the Minister of Finance and the Minister of Civil Aviation has been constituted to decide the financial parameters for evaluation of bids and the tariff regime. The Government plans to invite request for expression of interest (RFEOI) from prospective bidders separately for the two projects. Short-listing of bidders will be carried out on the basis of the RFEOI documents. Successful bidders will form a joint venture with the AAI through a shareholders' agreement. The successful bidder will have to submit a concept design of the airport along with the bid, which will have to be approved by the Government before the eventual selection process is completed. The Cabinet has also decided that the existing airports in the two metros will be handed over to the joint venture companies after the successful bidder is selected and the Government approval for the concept design and time frame is given. The successful bidder will also be required to furnish a masterplan for development of the airports within a year, which will again have to be approved by the Government. The joint venture will be free to undertake land-related non-aeronautical activities to generate revenues. However, issues relating to security and air traffic control will vest with the Government. Besides, the Government has also decided to develop a suitable human resource package to address the concerns of the AAI employees. It has been decided that employees working at the existing airports will be initially transferred to the joint venture company on deputation for three years, with the option of returning to the AAI at the end of the period or getting absorbed by the new company. In order to ensure a fast-track mechanism for technical and financial approval, besides co-ordination and decision-making, a project team and an inter-Ministerial group are proposed to be set up. A time frame of eight months from the date of the Cabinet approval has been laid down to finalise selection of the bidders.
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