Govt unlikely to insist on past experience for airport bids

The government is mulling a wider play for airport bids. Sources say the government is unlikely to insist on past experience for airport bids. These issues were discussed at a planning commission meeting today, says CNBC-TV18's Ronojoy Banerjee.

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The Planning Commission had circulated a draft master concession agreement which laid down the terms and requirements that any of the private players who are chosen to develop the six airports that the government is looking to privatize would have to meet.
One of the clauses in that which later became contentious said that the private player wining the bid did not necessarily require past experience or did not even have to tie-up with any of the existing players – something which was opposed by both GMR and GVK because GVK in 2007 had to tie-up with a South African firm for the development of the Mumbai Airport. Similarly even GMR had to tie-up with Fraport for the Delhi Airport.
Importantly today there was a consultation meeting which was chaired by the planning commission where it was unequivocally stated that this clause will not be changed.
Sources say it was stated at the meeting that whichever private player wins the bids for any of these six airports they would have to reinstate and incorporate the existing staff of Airport Authority of India. So, no extra or past experience is required for this.
The six airports that the government is looking to privatise include Jodhpur, Kolkata, Chennai, Lucknow, Ahmedabad and Guwahati. This is going to come as a big boost to the Tata's since they are going to enter the development of the airport space.
Also sources say as far as determining what the revenue model is going to be, whether they are going to follow a single till or double till or a hybrid model like in case of Mumbai and the Delhi airport all of that will be decided by Airports Economic Regulatory Authority of India (AERA) in the coming weeks.