Airport Privatization: Bidding Process for Delhi and Mumbai (E)

Abstract

Modernization of Delhi and Mumbai airports had been considered as early as 1996 by the Airports Authority of India (AAI). In June 2003, the AAI board approved a modernization proposal. These airports accounted for 47 per cent of the passenger traffic, 58 per cent of cargo traffic and 38 per cent of aircraft movement in 2003-04. They generated one third of all revenues earned by the AAI. Both Delhi and Mumbai airports handled twice as many aircraft movements as they were originally designed for, resulting in congestion for both aircrafts and passengers. The set of Cases focus on the bidding process towards their privatization. The process began in May 2004 with an original completion date of September 2004. However, for a variety of causes, the process got delayed and the bids were finally received by September 2005. The evaluation process of the bids was questioned at various levels. There were many reviews of this with inputs from experts. The way forward was put forth by the Empowered Group of Ministers (EGoM) in January 2006 by giving choice to the only technically qualified bidder to choose the airport given certain restrictions. Based on the choice, the decision on the other airport was to be taken. One bidder, who had lost the bid, felt the process arbitrary and filed petition in the High Court and then in the Supreme Court. Case A focuses on EGoM’s decision. Case B focuses on the choice made by the winning bidder. Case C focuses on the reaction of a losing bidder. Case D focuses on the courts’ decision. This case gives a summary of the actual judgement by the court.