Consortia with more than 10 per cent equity will be given additional weighting when bids will be evaluated for the Delhi and Mumbai airports' modernisation venture.
This has been done to ensure greater role of the airport operator in the running of the airport.
The evaluation process is also expected to give importance to financial commitments -- both debt and equity -- made by the promoters of the consortia.
It is stipulated that companies which are part of a consortium should commit to equity funding the venture. They will also need to commit debt-funding by financial institutions.
A consortium which does not satisfy these two requirements will be out of the bidding process.
The bidding will be done on the basis of revenue-share percentage offered by bidders to the government.
This means the project to privatise and modernise the airports in Delhi and Mumbai will go to companies offering the government a higher revenue-share percentage.
The government has set 5 per cent of gross revenue as the minimum offer to be made by the bidders.
In the event of a bidder emerging as the highest bidder for both Delhi and Mumbai airports, it will be awarded the airport where the bid margin between the highest bidder and the second highest bidder is the maximum.
Accordingly, the consortium that has offered the second best bid offer will get the second airport, provided that the bidder is willing to match the highest bid for the airport, according to the request for proposal (RFP) documents for modernising the two airports.
Government sources also said that the RFP document has put in strong cross ownership restriction between the Delhi and Mumbai airports.
As per the RFP, any common ownership by bidders bagging the two airports will not be allowed.
Besides, the government will also not allow common involvement or participation by an airport operator in both the airports, either directly or indirectly.
The joint venture company will also have the right of first refusal with regard to participating in any airports developed near the New Delhi and Mumbai airports on the basis of a competitive bidding process.
In the event of the joint venture company not emerging as the highest bidder, the company will be given the chance to match the highest bidder.
In the evaluation process, additional weightage is provided to bidders who commit to absorb more than the minimum level of 40 percent of employees of Airports Authority of India (AAI) in that particular airport.
At the same time, the government will also impose a financial penalty on the joint venture company, if it fails to provide employment to less than 40 per cent of the existing staff.
Privatising airports