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Date
: 13/02/2006
Source: Ministry of Transport
Title: Radebe: Mumbai International Airport bid award
Speech by Minister of Transport, Mr Jeff Radebe, at the ACSA,
Bidvest and GVK, Indian bid award - Mumbai International
Airport
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 sixe1 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 ACSA’s 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!
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