Airports upgrade has stiff riders

The government is proposing to set stiff conditions for companies that will bag the contract for upgrading Delhi and Mumbai airports.

There will be a lock-in period of at least seven years for an Indian company in the venture as well as for the airport operating partner, as per an initial draft prepared by the civil aviation ministry. If there is a foreign investor in the venture, it will also be subject to a similar lock-in of seven years.

"This has been done to ensure a more stable running of the airports venture. Besides, after entering into a joint venture partnership, the government does not want any change in the partnership leading to a delay in the implementation of the project," an official in the ministry told Business Standard.

The ministry is of the view that the Airports Authority of India, which will have a board position in the venture with a 26 per cent stake, should be an active partner and the approval of its representative on the board in key matters must be mandatory.

To this end, the government is proposing to include a clause in the joint venture agreement that all key decisions of the board will need 90 per cent support of the board. "The government will not be a sleeping partner in the venture," said the official.