Reliance AXA Mexico airport consortium falls below grade

Sreedharan panel reduces pass marks for Reliance-AXA Mexico team for airport privatisation

BY A CORRESPONDENT
11th January 2006
India's airport modernisation and revamp process has met with further delay, with a panel downgrading Reliance consortium below pass marks. This leaves only one bidder - the GMR- Fraport consortium left in the field.

The Delhi-Mumbai airport development saw several bidders, out of which only two - Reliance AXA and GMR-Fraport emerged successful in the evaluation. This would have have effectively meant zero competition, since one bidder will be allowed only one airport. There have been allegations of favouring one company, following which government appointed the E Sreedharan panel to take a relook at the bids. The Sreeddharan panel, after carefully studying the bidders, reduced the marks scored by Reliance to 75% from the the earlier 80. As per the scoring system, a minimum of 80 marks is necessary to be considered for the airport revamp process.

With the panel reducing the Reliance consortium's marks, there is uncertainty again over the process of metro airports' development. Surely, the field cannot be left to only one bidder alone. One possible way out would be to reduce the pass marks in such a way that there are about 4 bidders left.

Meanwhile, the Left parties have called for scrapping the entire process of airport bids and privatisation.

It may be noted that India's attorney general Milon general has already observed that there is nothing wrong with the bidding process, and that there is no need to go for re-bidding. The attorney general is the government's seniormost legal counsel.

Meanwhile, the outgoing chief of Mumbai Airport has been quoted in media reports as saying that the development of the airports should take place on a war-footing, since these airports are already bursting at the seams. He has also pointed at the need to develop the second airport in Mumbai within seven years.

In a related report, the Economic Times said that the government favours Airports Authority of India-led special purpose vehicles (SPVs) to develop the airports, instead of calling bids. It also said that according to this new line of thinking, Kolkata and Chennai airports can also be brought within the ambit of metro airport development.