Bidvest and GVK, Indian bid award - Mumbai International Airport
13 February 2006
Let me congratulate the GVK-SA consortium in their successful bid for the
modernisation and management of India's Mumbai International Airport. In
particular I wish to pay tribute to the two South African partners Bidvest and
Airports Company South Africa (ACSA), for this transaction marks the first
entry for both companies into one of the fastest growing economies from a
country and a regional perspective.
Many of you would have closely followed the India airport modernisation bid
with interest, given the participation of South African entities. About a week
ago the Indian Government announced successful consortia, comprising of GVK-SA
for Mumbai International Airport and GMR-Fraport for Delhi International
Airport. The bid was highly contested if one bears in mind that there were
initially 10 bidders at the Expression of Interest (EOI) stage in 2004, which
came down to six[e1] bidders at the time of final bid submission in September
2005. Other notable airport operator participants included Macquarie in
partnership with Aeroports de Paris (ADP), Munich; Turkey-based airport
operator (TAV) and Mexican airport operator (ASA).
The consortium will be given a 30-year concession, for Mumbai and Delhi
international airports, with an option for a further 30 years, to restructure
and modernise each of the aforementioned airports in accordance with
world-class standards in terms of International Air Transport Association
(IATA) and International Civil Aviation Organisation (ICAO) service levels.
They will partner with the Indian Government, which will retain 26% in each of
the airports. The Indian Government was looking for consortia with technically
competent airport operators to restructure and modernise each of the airports.
The Indian Government wanted to promote service and price competition between
the two airports through separate ownership. We are delighted that the bid
process found GVK-SA consortium to be such a partner.
The value proposition to the Indian Government is that the consortium is
committed to positioning Mumbai International Airport as a preferred gateway in
India in terms of service excellence through the implementation of development
plans and the intensive transfer of skills to the local airport employees. This
will be done through the investment commitment of approximately US$1,5 billion,
which ACSA CEO, Ms Hlahla, will speak to in a short while.
South Africa walked down this road before, with the restructuring of ACSA in
1998 that resulted in Aeroporti di Roma (ADR) becoming a strategic equity
partner (SEP). The end result of the process was a successful partnership that
included stakeholders such as airlines, local communities, and the regulator,
to mention but a few. Through this process, we saw ACSAâs enterprise value
double to more than R8,375 billion.
Whilst each of the consortium partners will be afforded an opportunity to
explain what this award means to them, it is important that I highlight to you
that this award marks the beginning of a new era for ACSA as the company forges
ahead into the international arena.
ACSA has over the last 15 years experienced tremendous growth in the field
of airport infrastructure development and service delivery. ACSA has been in
discussions with other African countries over the past few years, with a view
to assisting these countries with airport infrastructure development.
Efficiently operating airports are a requirement to development, not only
commercially, but also that the environment must be safe and secure, so that
airlines and operators can fly in and out of these areas with confidence.
The relationship between ACSA and Mumbai Airport grows out of a strong
relationship between South Africa and India. As a Minister familiar with
restructuring of State owned enterprises in South Africa I have noted media
reports from India highlighting the worries and concerns mainly of labour and
workers who believe that their interests and conditions of service are at risk,
with the Indian policy of restructuring. I want to assure all concerned that as
the Republic of South Africa we will not disregard or seek to bypass either
established labour relations systems in India, or engage in activities that
undermine legitimate rights of workers.
I wish to say to the GVK-SA consortium whilst the bidding process was a big
challenge, delivering on the value proposition to the people of Indian would be
equally challenging. As Government, we have confidence that you will deliver
beyond the expectations of all stakeholders and make the two countries
proud!
I thank you.
Issued by: Ministry of Transport
13 February 2006
Source: Department of Transport (http://www.transport.gov.za)
[e1]1 â 9 write out e.g. one, from 10 upwards only numbers
