India Ministry of Civil Aviation issues RFQ for privatisation of Chennai and Lucknow airports

India's Ministry of Civil Aviation announced (03-Sep-2013) that a Request For Qualification (RFQ) for selection of the prospective bidders for Chennai and Lucknow airports has been invited. The announcement follows the recommendations of an Inter-Ministerial Task Force for operation, management and development of select airports on public private partnership (PPP) basis.

• Request For Qualification: RFQs for Chennai and Lucknow airports are invited up to mid Oc-2013. Financial bids are likely to be received by mid-Dec-2013. The scope of privatisation covers the entire airport, including the airside and city side facilities on long term concessions. Applications for pre-qualifications are invited from single entity or a group of entities, under a special purpose vehicle (SPV). RFPs will indicate parameters for determining charges for aeronautical services as well as a user development fee. The concession period willll be pre-determined and indicated in the draft concession agreement. RFQs for the other four airports due for privatiation - Kolkata, Guwahati, Jaipur and Ahmedabad - are likely to be taken "on the same pattern shortly" according to the ministry;
  
• Airports Authority of India participation: To secure representation of the AAI on the board of the SPVs, the concession agreement will include a provision for a golden share within a shareholders' agreement, forming part of the overall concession agreement. The selected bidder shall be required to protect the interest of the existing employees of the airports;
  
• Bid awards: Bids will be invited for the project on the basis of the premium in the form of revenue share to the authority for award of the concession. The authority may prescribe a ceiling of revenue share and a bidder who wishes to make an offer above such ceiling shall have the option of giving such bid on the additional parameters as may be specified in the RFP. The premium shall constitute the sole criteria for evaluation of bids. The project shall be awarded to the bidder quoting the highest premium. Based on the experiences, score and the criteria specified in RFQ, the applicants shall then be ranked on the basis of their respective aggregate experience scores and short-listed for submission of financial bids. The authority expects to short-list up to seven pre-qualified applicants for participation in the financial bid stage;
  
• Airport charges: The concessionaire can levy tariffs for aeronautical services including a user development fee (UDF), to be initially determined by the Airports Economic Regulatory Authority (AERA). Charges would be revised normally once every five years by the AERA. The RFP would indicate the parameters for determining charges for aeronautical services as well as the UDF. RQFs will outline the charges determination process;
  
• Limitations of PPP: No applicant, including related/associate entities, will be awarded concessions for more than two of the six airports. Applicants and associates, will not be eligible for concession awards at more than one airport from Kolkata, Chennai and Ahmedabad airports. [more - original PR]