Date:18/05/2006 URL: http://www.thehindu.com/2006/05/18/stories/2006051813010400.htm

Karnataka - Bangalore

Decision on contracts on ground-handling services at international airport held up

P. Manoj

The deals will be announced only after the new civil aviation policy is unveiled

Current policy permits only AAI, Air India and Indian to provide these facilities at airports
But private companies are likely to be allowed to offer the services, says BIAL official
BIAL floated open tenders to select partners for operating ground-handling facilities

It will select two groups, which will compete with each other to the facilities

Bangalore: Bangalore International Airport Limited (BIAL), the special purpose vehicle that is building the first greenfield private-sector owned and operated airport in the country, has said that a decision to award two independent contracts for providing ground-handling services at the proposed airport has been held up over a government policy that permits only the Airports Authority of India (AAI) and national carriers Air India and Indian (formerly Indian Airlines) to provide these facilities at domestic airports.

`Policy imposed'

Chief Executive of BIAL Albert Brunner told The Hindu that as the proposed airport was to be privately owned, BIAL was not bound to follow the policy. "But it was imposed upon us," he said.

BIAL floated open tenders to select strategic partners for operating ground-handling facilities at the airport, which is expected to start operations in April 2008. The company has completed the evaluation of partners for providing the facilities, but an announcement on the successful bidders has been put on hold as a new policy on civil aviation is expected to be announced by the Union Ministry of Civil Aviation shortly.

Significantly, the policy has proposed that "apart from AAI and the national carriers — Air India and Indian — private agencies will also be encouraged for providing ground handling services".

"Besides, with the privatisation of the Delhi and Mumbai airports, the chances that more companies will be allowed to provide ground-handling facilities at domestic airports have brightened," Mr. Brunner said.

Bids

Both Air India and Indian have bid for the contract for providing ground-handling facilities at the proposed airport. While Indian has bid on its own, Air India has teamed up with Singapore Airport Terminal Services for the deal. Others in the fray include Cambatta Aviation, Globe Ground India, Jet Aviation-KC& IC, Jet Air-Dnata, Menzies Aviation-Bobba Group, Reliance Energy-Worldwide Flight Services and Swissport International.

Global majors interested

Mr. Brunner said BIAL would not re-tender the contract after the new civil aviation policy was announced since many global majors in ground handling at airports had bid for the deal.

Successful bidders will be announced after the new civil aviation policy is cleared by the Government. BIAL will select two independent partners, who will invest in its own facility and compete with each other to provide ground-handling facilities.

Private promoters, such as Siemens Projects Ventures, Larsen & Toubro and Unique Zurich Airport, hold a combined stake of 74 per cent in BIAL.

The Karnataka State Investment and Industrial Development Corporation and AAI hold the remaining equity.