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Wednesday, Sep 14, 2005

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Hochtief too pulls out of airport project

Our Bureau

New Delhi , Sept. 13

WITH less than 24 hours left for the submission of bids for the Delhi and Mumbai airports modernisation project, the Government's plans hit another roadblock on Tuesday, with the Piramal Group that had tied up with the German airport operator, Hochtief, bowing out of the race.

On Monday, the Singapore-based Changi group that had associated itself with the Bharti-DLF combine withdrew from the race, as the airport operator said it was not confident of meeting some of the conditions set in the tender.

Both Changi and Hochtief were said to be upset about the $80-million penalty that would have to be borne by the foreign partner alone, in case the consortium winning the bid to modernise and restructure the two airports was unable to meet the Government laid-down standards.

However, several of the other consortiums - including the Turkish airport operator, TAV, GMR and GVK groups - have confirmed their participation, saying that they would be submitting their bids on Wednesday. Parties interested in participating in the process have to submit their bids by 5 p.m. on September 14.

"We will be putting in a bid. We have no problem with the transaction document. The tough penalty clause imposed on foreign companies, in case they do not meet the standards laid down, is a well-accepted global phenomenon and is generally used to understand the seriousness of the bidders in the process," the Chief Executive Officer, TAV, Mr Sani Sener, said. The Turkish firm is to pick up a 26 per cent stake in the project with the Essel Group picking up a 48 per cent stake.

While announcing the withdrawal of Hochtief, the Piramal group and its partner L&T Infrastructure Development Projects Ltd have requested for an extension of time, as they were committed to participate in the bidding process.

Among the quality standards said to have been mandated by the Government to make the airports world-class entities include the new operator ensuring within three years the minimum connect time between domestic and international airport be of 60 minutes, while a passenger should be able to connect from one domestic flight to another in 45 minutes. Similarly, the waiting period in a line for security check should be less than three minutes and that the first bag should arrive within 10 minutes and the last within 30 minutes of the flight arrival. The airport operator should ensure both these conditions within two years. The other requirements stipulated by the Government for creation of world-class airports include the ease with which a passenger can find his/her way through the airport and proper flight information screens, among others.

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