— PHOTO: V.V. KRISHNAN

JOBS AT STAKE: Employees of the Airports Authority of India demonstrate outside the Rajiv Gandhi Bhavan in New Delhi on Tuesday in protest against the privatisation of airports. Even as the CPI (M) warned the Government against going ahead with the plan, the Aviation Minister announced that GMR-Fraport of Germany and GVK-South African Airports combine won the contracts for the modernisation and operation of the Delhi and Mumbai airports. The AAI employees have decided to boycott work on Wednesday as a mark of protest.

NEW DELHI: The Government on Tuesday chose two private consortia for modernising and restructuring the Delhi and Mumbai airports.

While the GMR-Fraport consortium won the bid for the Delhi airport, the GVK-South African Airports combine bagged the Mumbai airport project, Minister of State for Civil Aviation Minister Praful Patel announced.

The successful bidders were decided at a meeting of the Empowered Group of Ministers (EGoM) formed to oversee the modernisation process.

Final approval today

The EGoM, headed by Defence Minister Pranab Mukherjee, completed its deliberations on Tuesday evening. The final approval would be given by the Union Cabinet on Wednesday, Mr. Patel said.

The investment for the Delhi airport is estimated to be around Rs. 2,800 crore and for Mumbai, it could be around Rs. 2,400 crore. The investment of Rs. 5,200 crore is likely to be for the first phase of modernisation, to be completed by 2010.

Tight security

Earlier in the day, the financial bids of the four qualified bidders for each airport were opened in the Civil Aviation Ministry amid protests and demonstrations by employees of the Airports Authority of India (AAI). The Rajiv Gandhi Bhavan, housing the AAI and the Civil Aviation Ministry, was barricaded and virtually turned into a fortress by policemen and security personnel.

Giving details of the final bids for the Delhi airport, Mr. Patel said GMR-Fraport's bid earmarked 43.64 per cent of revenue share to the AAI. Reliance-ASA's bid was the highest at 45.99 per cent. D.S. Constructions-Munich Airport had earmarked 41.15 per cent revenue share to the AAI and Sterlite31.04 per cent.

Sole qualifying bidder

The Minister said GMR-Fraport would match the highest bid and give a revenue share of 45.99 per cent to the AAI. In the final evaluation process, GMR-Fraport had emerged the sole qualifying bidder subject to its matching the highest bid. It was given the option of matching the top bidder as it was the sole technically qualified bidder among the five aspirants for the Delhi airport and the six for the Mumbai airport.

For the Mumbai airport, the GVK-South African Airports' bid was 38.7 per cent, GMR's offer was 33.03 per cent, DS Constructions-Munich 28.12 per cent and Reliance-ASA 21.33 per cent.

However, Reliance-ASA expressed its "utter shock and surprise" over the changes in the published tender conditions, barely two hours before the opening of the bids. In a statement, the Anil Ambani-controlled Reliance Airports Developers said there was no provision in the "Request for Proposal or tender conditions to give any bidder an option to match the highest bid, that too selectively for only one airport." It said such changes were "untenable and unconstitutional."

On the concerns of the AAI employees, Mr. Patel said both the consortia had given a written commitment to absorb 60 per cent of the AAI employees as against the minimum requirement of 40 per cent. For the first three years, all AAI employees would remain on deputation to the two joint venture companies.

"Not a single employee of the AAI would remain jobless. If someone is left out by the two companies, he would be employed by the AAI itself as it would need workforce to manage other airports," Mr. Patel said.

On the issues raised by the Left parties, he said the Government had adopted a "middle path" and all aspects, concerns and interests of the country and the AAI employees had been considered. The AAI would be able to improve its financial health by the revenue share from the two airports. "The employees should not feel left out; the AAI is not getting privatised. It is a growing organisation, and it will focus its attention on other airports. It will be well covered financially."

On why the alternate plan submitted by the AAI Employees Forum was not considered, Mr. Patel said it was felt that the AAI should not spend all its resources only on the Delhi and Mumbai airports but should develop the 35 non-metro airports as the civil aviation sector was growing at a rapid pace.

Master plans in 6 months

The airports are likely to be handed over to the companies by March-end. Over the next six months, they will prepare master plans for modernising the airports.

The revenue from the Delhi airport in 2004-05 was Rs. 400 crore, official sources said. Under the new regime, the AAI would get a share of 46 per cent — about Rs. 180 crore.

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