Metro airports: GoM feels money matters too

The Group of Ministers (GoM) empowered to oversee the privatisation of Delhi and Mumbai airports said it would also take into account the fi...

The Group of Ministers (GoM) empowered to oversee the privatisation of Delhi and Mumbai airports said it would also take into account the financial bids — in addition to qualitative parameters — before finalising the financial consultant for the project.

The GoM — comprising Finance Minister Jaswant Singh, Disinvestment Minister Arun Shourie, Law Minister Arun Jaitley and Civil Aviation Minister Rajiv Pratap Rudy — was expected to finalise the consultant today based on the options shortlisted by the inter-ministerial group last month. The IMG comprises senior officials from related ministries.

The empowered group upheld the IMG recommendations and shortlisted Ernst & Young, ABN-Amro and KPMG, but said a final decision would be made only after assessing the financial bids. Apparently, what was tabled today before the GoM included only the qualitative aspects.

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The Civil Aviation Ministry will now formally ask for the financial bids, which will be tabled at the next GoM meeting, expected to be on November 14. ‘‘The group wanted to analyse both the qualitative as well as the financial aspects of the bids received. This should not take much time and we would have it prepared for the meeting next week,’’ said Rudy.

The empowered group also decided to appoint a technical consultant to advise on issues such as structure, construction and architecture. ‘‘The group felt that we should have an adviser on technical issues too. But this, of course, will be required at a later stage. First, we have to finalise the financial consultant,’’ added Rudy.

With the first meeting of the GoM held today, Rudy said the process of privatisation of the two airports had been set in motion. The progress would be monitored on ‘‘a week-by-week basis’’ to meet the deadline of May 30, 2004.

The empowered group also approved the terms of reference for the proposed financial consultant which included carrying out a traffic forecast, framing tariff policy, long-term contracts, concessional agreements, real estate estimates, environmental policy, human resource details, airport financial analysis and projections.

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The recommendations of this committee, set up to study financial parameters for the privatisation of two airports, would be sent to the Union Cabinet for approval.

On September 11, the Cabinet had approved the restructuring of the two metro airports through joint-venture route with a maximum of 74 per cent private equity. The Airports Authority of India would hold 26 per cent stake and will be responsible for air traffic services and security.

The projects will be handed over in eight months. The GoM will also examine issues related to the expression of interest at its next meeting.