No longer a flight of fancy: bigger and better airports in New Delhi, Mumbai

It’s learnt that Reliance-ASA Mexico, out of the race after GMR-Fraport (Frankfurt) exercised its first right of refusal today, has written to the Civil Aviation Ministry claiming that the process followed is not ‘‘tenable.’’ Stopping short of threatening legal action, sources said, it raised questions of law and constitution.

A caveat is usually filed in anticipation of legal action, where the court is urged to listen to other side before passing an order. In this case, the Government, through the Airports Authority of India, will seek to be heard by the court in case a petition is filed challenging the Delhi and Mumbai modernisation process.

More importantly, the government was able to keep to its January 31 deadline for selecting the private consortia through a process that got tangled in controversy in the past month.

The sole criteria for the financial bid was the revenue share specified for AAI. Reliance came up with the best bid for Delhi (45.99 per cent share) while GMR stood second with 43.64 per cent.

But since GMR was the only bidder to have scored above 80 per cent in both rounds of technical evaluation (Airplan and the Sreedharan panel), the Empowered Group of Ministers decided to give it a chance to match the best bid.

GMR, which was also in second spot behind GVK at Mumbai, decided to go for Delhi and matched the Reliance bid.

This cleared the path for GVK which bagged Mumbai quoting a revenue share of 38.7 per cent. Both selected bidders have proposed to absorb 60 per cent AAI employees, which is 20 per cent more than what the government had kept as minimum absorption.

Plus, Civil Aviation Minister Praful Patel said his ministry will continue to ‘‘encourage’’ the two consortia to absorb more employees in the future.

From now on, it will take up to anything between three to six months before the airports are transferred to the two joint venture companies. The operation, maintenance and development agreement (OMDA) is the key document that has to be finalised.

The agreements which have to be signed:

• Shareholders Agreement

• Land Lease Agreement (30 years, extendable on performance by another 30 years)

• State Support Agreement

• Substitution Agreement

OMDA becomes effective only after these are signed. Before this, AAI has to register two companies under the existing names to begin talks. Both consortia will have to pledge Rs 150 crore upfront.