Tatas, foreign firms participate in pre-bid meeting for airports: report

Major Indian companies like Tata and foreign firms like Fraport and Celebi participated in a pre-bid meeting for privatisation of Chennai and Lucknow airports, according ot official sources.

Turkish firm Celebi, which provides ground-handling services in Delhi and Mumbai airports, the Frankfurt airport operator and representatives of companies like GVK and Sahara also attended the meeting on Friday, ahead of the formal inviting of bids for operating and managing the two major airports, the sources said.

The Airports Authority of India (AAI) has also initiated the process of inviting request for qualification (RFQ) from interested bidders for operating and managing the Kolkata, Guwahati and Jaipur airports.

These five airports and the one in Ahmedabad have been taken up by the government for handing over to select private parties for operation and management. All these airports have already been modernised by the AAI at a high cost to the exchequer.

The airports would be transferred to selected private concessionaires which would be allowed to pick up 100 per cent equity in a special purpose vehicle (SPV) for operating, managing and developing them on a long-term lease of 30 years.

At the meeting, the AAI agreed to the prospective bidders' suggestion for site visits on September 28 to Lucknow airport and October 8 to Chennai airport, according to the sources.

It is, however, early to say whether all the companies which attended the meeting would actually participate in the bidding for one of the two airports, they said.

The Civil Aviation Ministry's move to hand over these airports to private sector has come in for criticism from various quarters, including the AAI employees who are planning protests, including gate meetings, demonstrations and a nation-wide strike.

The move follows privatisation of major revenue-earning airports at Delhi, Mumbai, Hyderabad and Bangalore. The works to be carried out by the private parties at these six airports would include construction, resurfacing or extension of runways, taxi tracks, isolation bays and aerobridges, modification of the old terminal and local connectivity, like the metro in Kolkata.

The RFQs have been invited from a single entity or a consortium of entities who would form a special purpose vehicle (SPV) for running these airports. The AAI would not be part of the SPV and would not infuse any equity in it.

In order to secure representation of the AAI on the board of the SPV, the Concession Agreement is likely to include a provision for issue of a 'golden share' which would enable the public sector airports body to have a say in major matters concerning these airports, the sources said.

The selected concessionaire would be able to levy tariffs for aeronautical services including the User Development Fee as may be determined by airport regulator AERA. The applicants would not be eligible for the award of more than one airport, apart from Kolkata, Chennai and Ahmedabad airports.

Apart from the AAI unions, the move has come been criticised by airlines and their global representative body, International Air Transport Association on the ground that it would lead to massive hikes in airport costs and charges.