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India to award contract to revamp New Delhi, Mumbai airports

31-Aug-2005

NEW DELHI (XFNews) - India's civil aviation ministry said it plans to award a contract for privatising the gateway New Delhi and Mumbai international airports before the end of the year.

Eight consortia are in the running -- including Singapore's Changi Airport, Aeroports de Paris and Malaysian Airports.

They have partnered with domestic firms such as telecoms giant Bharti, construction firm Larsen and Toubro, and the largest private group, Reliance.

The ministry released final bidding documents Tuesday, giving the contenders a maximum of two weeks to submit their final proposals for the airport revamps, which are expected to cost 1.24 bln usd.

"As soon as the bids are in, we will start the process of evaluation," civil aviation secretary Ajay Prasad told reporters. "We are trying to award the contracts before the end of this year."

Private firms will be allowed to hold up to 74 pct equity in the companies managing the airport, while the remaining stakes will be with the state-run Airports Authority of India and government-owned firms.

Foreign companies will be allowed to hold as much as 49 pct, but foreign airlines will not be allowed a stake.

The Airports Authority of India runs the country's 130 airports.

India invited private parties to manage the nodal Mumbai and Delhi airports as a lack of funds has hampered their modernisation.

India's domestic and international airline passenger traffic has soared by 25 percent a year on the back of strong economic growth, but the lack of infrastructure such as parking space and runways was obstructing expansion.

Prasad said the government would ask the successful bidders to complete the first stage of modernisation before 2010, the year New Delhi will host the Commonwealth Games.

He added that the government had "tentatively selected" the site for a second international airport in India's commercial capital, Mumbai.

"It may take seven to eight years to build," Prasad said. "Until then, the private bidder will expand the present airport to its maximum potential."

India's aviation sector is poised for rapid expansion over the next five to 10 years, with a host of new budget carriers launching operations in the past year that have ushered a boom in air travel.


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