The government intends to keep a close vigil on the modernisation of the Delhi and Mumbai airports through the conditions laid down in the operation, management and development agreement with the developers.
According to the agreement, the GMR-Fraport and GVK-South African Airport consortiums -- which have the contracts for Delhi and Mumbai airport, respectively -- will have to obtain the consent of the Airports Authority of India for key decisions.
In addition, the joint venture company will have to get the approval of the government for every development plan that requires an investment exceeding Rs 100 crore.
The AAI will hold 26 per cent equity in the company that will execute the project. The rest will be held by a joint venture between the consortium partners, which are yet to disclose the shareholding pattern.
The government has also proposed a lock-in period of at least seven years for the equity holders including the airport partner.
If a private partner wants to sell its equity, it will have to first offer it to its partners, which will have the first right of refusal. If any of the partners agrees to buy it, it will have to buy the entire chunk and not just a part.
In case the equity being sold is not purchased by any of the private partners, then the AAI or the government will have the right to buy it.
If all of them refuse, then the shares can be offered to an outsider. The government's approval will have to be taken for bringing a new partner on board.
These conditions will be incorporated in the joint venture agreement between the AAI and the private consortium.
However, these will not apply if the AAI's holding falls below 10 per cent.
The bids will be awarded for an initial term of 30 years, which can be extended by another 30 years.
After the expiry or termination of the lease, the AAI will take over all the assets for operating the airport and will have the option to take over all or any of the commercial or ancillary assets.
