Privatization of Delhi & Mumbai Airports - A Bumpy Take Off
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Case Details:
Case Code : ECON016
Case Length : 21 Pages
Period : 2003-06
Pub Date : 2006
Teaching Note : Available
Organization : Airport Authority of India, Ministry of Civil Aviation
Industry : Civil Aviation
Countries : India
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Excerpts Contd...
The Release of the Note
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In order to bring transparency to the bidding
process, the GoI made public a confidential note dated December 3, 2005.
The note, which was prepared for the EGoM, contained the views of the
GRC and IMG on the bidding process, comments on the various parties'
ability to fulfill the contract, several observations regarding the
bidding process like the technical evaluation and the apparent
interests, if any, of the consultants. According to the note, the GRC
was of the view that there was no apparent bias or prejudice against any
individual bidder in the process. However, the GRC found the evaluation
criteria, as specified in the RFQ, subjective in nature which,
therefore, made it difficult for the evaluators to allocate a purely
objective marking for the bidders... |
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Efforts to Bring in Transparency
To quell the controversy that arose with the announcement of the technical bid
results, Reliance sent an open letter to the EGoM dated December 20, 2005. It
was signed by J.P.Chalasani (Chalasani) Director, Reliance Energy, and stated
that the bidding process was not manipulated. The letter stated that most
airport evaluations undertaken by international organizations were subjective in
nature...
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Continuing Controversy
The announcement of the successful bidders gave rise to other
controversies. Reliance-ASA, which earlier was one of two technically
qualified bidders and was sure to get at least one airport, ironically,
did not get either airport. Immediately on the announcement of the
financial bid results, Reliance protested against the award of the bids,
pronouncing the modification in tender conditions hours before the final
decision as 'untenable' and 'illegal'. It challenged the bidding process
in the Delhi High Court and sought a stay order. Even Sterlite-Macquarie-ADP
and DS Constructions-FMG dissented on the award of the bids... |
Outlook
Analysts were of the view that even if the case did get sorted out, it was
unlikely that the projects would be completed on time and in line with the
several conditions, some of which were quite difficult to comply with. One of
the responsibilities given to the bidders was to clear the slums at the Mumbai
airport. It was anticipated to become another roadblock to the modernization of
the airports...
Exhibits
Exhibit I: Services Provided by AAI
Exhibit II: World's Top Ten Airports
Exhibit III: Mandatory Projects to be completed by the Winning Consortium by
2010
Exhibit IV: Information about the Bidders
Exhibit V: Marks Awarded to various Bidders by EC for Delhi Airport
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