Rediff.com  » Business » US, British firms bid for Rs 700-cr Mumbai airport deal

US, British firms bid for Rs 700-cr Mumbai airport deal

June 09, 2008 10:54 IST

US-based Worldwide Flight Services, Swissport International of Spain and UK's Menzies Bobba Ground Handling Services are among seven bidders vying for the Mumbai International Airport's Rs 700 crore (Rs 7 billion) yearly ground handling contract.

While Swissport, an European infrastructure and service corporation providing value-added airport services at 187 airports across 43 countries, is going with India's Punj Lloyd group, Menzies is partnering Cambata Aviation for the bid. Cambata has been providing airport services at the Mumbai airport since 1967.

Turkey's Celebi Ground Handling is reportedly teaming up with Spencer Travels as overseas bidders. Spencers has a presence as an agency representing Cathay Pacific for passenger and cargo in southern and eastern parts of India and is also an agency for KLM Royal Dutch Airlines.

The GVK-led consortium mandated to modernise and upgrade the Mumbai International Airport Limited may name a winning bidder for the handling contract as early as August or at least four months ahead of the new regulations that make it mandatory for airport operators to either get into ground handling directly or to invite specialised agencies to bid for both passenger and ramp handling at the airport, besides the National Aviation Company Ltd.

The new policy comes into effect from January 1 next year. An MIAL spokesperson refused to divulge details as to when the bids would be finalised. "We will not be able to give those details though we will have to get the contracting within a few months," he said.

MIAL

had invited bids in January for the contract. "We have received applications from specialised agencies and will soon shortlist names," said GV Sanjay Reddy, managing director, MIAL. The ground handling contract at Mumbai airport is for 10 years.

Confirming its bid for the ground handling services at the Mumbai airport, Atul Punj, chairman, Punj Llyod group, said: "We have bid for the ground handling contract for the Mumbai airport with international group Swissport. We are the investors and the local partners in the tie-up."

Punj, however, did not divulge much details and said the company was in the process of appointing a CEO for the new ground handling agency. Punj Llyod has recently become active in the Indian aviation space.

What makes the bid for Mumbai airport lucrative is the sheer number of the air traffic movements at the airport - 700-735 per day - making it the busiest airport with an estimated annual business size of Rs 650-700 crore (Rs 6.5 to Rs 7 billion) pegged conservatively.

Currently, there are 40-odd local agencies involved in ground handling besides the airlines. Usually, 15 per cent of the contract value is the revenue share between the operator and the contracting parties.

The award of ground handling contracts to agencies has led to controversies involving airport operators and airlines, who want to do the job themselves. However, the civil aviation ministry's intervention has ensured that airlines do self-handling till next year, by when a policy will come into being.

Manisha Singhal in Mumbai
Source: source
SHARE THIS STORY