Eight firms line up to bid for airport privatisation projects

GMR, GVK, Adani among others interested in the programme.

3 min readNew DelhiFeb 12, 2015 02:10 AM IST First published on: Feb 12, 2015 at 02:10 AM IST

By: Sharmistha Mukherjee

As many as eight companies including GMR Airports, GVK Group, Adani Ports and Special Economic Zone Limited, Siemens Postal Parcel & Airport Logistics Pvt Ltd and International Business Development Flughafen Zurich AG Postfrach have evinced interest in bidding for the privatisation programme of the Chennai, Kolkata, Ahmedabad and Jaipur airports.

Others in the fray are Egis India Consulting Engineers Pvt Ltd, Flemingo Duty Free Shop Pvt Ltd and Bhadra International (India) Pvt Ltd, informed government sources.

Senior officials of the civil aviation ministry on Wednesday held a pre-application conference for industry executives of firms interested in bidding for the operations, maintenance and development of airports at Chennai, Kolkata, Ahmedabad and Jaipur.

[related-post]

However, the numbers of bidders who have come forth is lesser than the 11 private firms who had expressed interest in privatisation projects of the Chennai and Lucknow airports in 2013. Several domestic as well as international firms who have opted out of the race now include IL&FS Transportation Networks, Tata Projects, Tata Realty and Infrastructure, Essar Projects India, Cochin International, Essel Infraprojects, Fraport, Reliance, Sahara Group and Turkey’s Celebi Habacilik Holding AS.

The award of the airport privatisation projects had to deferred at the time following a difference of opinion between the Union civil aviation ministry, then led by Ajit Singh, and the Planning Commission, over the terms of the project-award agreement.

Though the new government led by Prime Minister Narendra Modi has brought airport privatisation back on the table, it has also halved fresh investments required to be made by private concessionaires for developing these airports in the next three to five year period. The four airports at Chennai, Kolkata, Jaipur and Ahmedabad, identified for privatisation, are now likely to see fresh investments of Rs 1,839 crore — a decline of 41.6 per cent as against combined capital requirement of Rs 3,150 crore identified for developmental works earlier.

The move has raised questions from certain quarters within the ministry itself over the need for putting them on the privatising table. A senior official in the Airports Authority of India (AAI), said, “What is the need of privatising the Chennai and Kolkata airports when we have already made such huge investments in upgrading them?”

AAI has already invested Rs 2,700 crore for expanding capacity and upgrading the Kolkata airport. Capital invested for upgrading the Chennai airport stand at Rs 2,400 crore. AAI is sitting on cash reserves of Rs 2,400 crore and if required can even raise resources to meet planned development works at Chennai and Kolkata (totalling Rs 867 crore).