By IPS Correspondents
NEW DELHI , Jan 9 2006 (IPS)

Aeropuertos y Servicios Auxiliares (ASA), the operator of the largest international airport in Latin America at Mexico City, is fighting with its back to the wall to participate in a programme to modernize India’s two largest airports, in the national capital and the commercial hub of Mumbai.

ASA belongs to a consortium of firms led by Reliance Airport Developers, which in turn is part of one of India’s largest privately controlled corporate conglomerates, that has bid for contracts to modernize the two airports, involving expenditure in excess of three billion US dollars.

Unfortunately for ASA and Reliance, the airports modernization programme has got embroiled in a major controversy. The government of India’s civil aviation ministry has been accused of laying down faulty tendering procedures.

The infirmities in the bidding procedures have sparked allegations that two of the eight bidders shortlisted – including the Reliance-ASA consortium – have been favoured at the expense of others for award of 60-year contracts to operate the two airports, that account for nearly half of India’s air traffic.

Both airports badly need upgradation. Their facilities are currently being used by twice the number of passengers they were originally meant for. Consequently, the two airports have acquired notoriety for poor service.

One aspect of the controversy over the bidding process for the modernization programme for the two airports is the claim that the tendering did not encourage competition and lacked transparency.

Another questionable aspect in the shortlisting is the perception that ASA of Mexico is not adequately qualified or competent to handle the work at hand.

It has been alleged that a bidding consortium that had the operator of Munich airport as a partner had been evaluated behind the Reliance-ASA consortium on the basis of subjective criteria used by consultants appointed by the ministry.

A note sent by an “empowered group of ministers” (or political heads of government departments) to a committee of secretaries (or senior civil servants) caustically remarked that while India has been attracting “world-class investors” in various sectors of its economy, in this instance, “we have managed to land ourselves in a situation where the consultants have chosen the bidders who should get one airport eachàthis is compounded by the fact that of all the airport operators in the world, we have chosen Mexico through technical evaluation, and not by competition.”

ASA has, however, refuted what it describes as “misconceptions and misinformation” that has been spread against the Mexican company in various reports in the Indian media.

It has pointed out that it is operating Latin America’s largest and busiest airport that handles around 24 million passengers a year – or equal to the number of passengers handled by the New Delhi and Mumbai airports put together.

On December 8, ASA’s Chief Executive Officer Ernesto Velasco Leon wrote to India’s Finance Minister Palaniappan Chidambaram mentioning that reports prepared in March 2005 by the Airports Council International had ranked Mexico City’s international airport 42nd in terms of passenger traffic and 39th in terms of operations, above airports like Beijing, Shanghai and Kuala Lumpur (in passenger terms) and above Rome and Tokyo (in operations).

Leon’s letter, made available to IPS, also sought to disparage a survey conducted by Skytrax that had placed Mexico City in 119th position on the ground that it had been “conducted without the knowledge of ASA/MCIA” (or Mexico City International Airport)..

“àwe wish to clarify thatàvarious organizations (AETRA, J D Power, Skytrax etc.) carry out surveys, each of which seeks to measure a different set of parameters all of them qualitative in nature and based on passenger opinions which necessarily are subjective,” the letter stated, adding that airports with a high ranking in the Airtrax survey have a low ranking in the J D Power survey and vice versa.

The ASA CEO claimed that Skytrax had ranked some of the world’s “largest and operationally well managed airports in a very skewed manner”. For example, Heathrow in London had been put in 87th position, Chicago at 103 and Beijing at 123.

Certain officials in the Indian government are apparently unconvinced by ASA’s claims of possessing expertise. Gajendra Haldea, adviser to India’s Planning Commission, had stated in a note: “Unfortunately, the bidding process has failed to attract or pre-qualify any of (the) à operators” of the best airports in the world, such as Hong Kong, Singapore, Seoul, Kansai, Dubai and Kuala Lumpur.

He had added that it was doubtful if the partners chosen by the short-listed Indian bidders would enable the country’s two airports “to achieve world/Asian standards through airport operators who seem to be performing inadequatelyà”

ASA, predictably, has a completely different point of view. It manages some 950 operations a day at Mexico City where peak periods see 60 planes landing or taking off in a single hour “despite the difficult topography of the Mexico City valleyàwith only one approach for landings and take-offs and two close runways which do not allow simultaneous operations”.

Leon’s letter to Chidambaram – copies of which have been sent to Mexico’s Foreign Affairs Minister Ricardo Flores Magon and Mexico’s Ambassador to India Rogelio Granguillhome – claims most passengers and stakeholders “have had very favourable experiences” at Mexico City airport “even when construction activities for expansion and other de-congestion measuresàwere being carried out.”

ASA went on to argue that Mexico City’s airport system had a “socio-demographic profile” that made it operationally similar to the airports at Delhi and Mumbai, especially the latter in terms of congestion and “restricted land availability”.

The letter says ASA’s experience in completely revamping the terminal building at the Mexico City international airport, construction of a new terminal building and the development of a speedier “automated people moveràwould be extremely relevant” for India.

Leon also assured the Indian government that it would bring in “the best of our professionalsàif our consortium is selected as the preferred bidder”.

The evaluation report on the bidders for the modernisation of New Delhi and Mumbai airports submitted by private consultants has been referred to no less than four different official committees comprising civil servants and politician-ministers.

The “empowered group of ministers” headed by defence minister Pranab Mukherjee has asked a panel of bureaucrats headed by Cabinet Secretary B K Chaturvedi – who is India’s seniormost civil servant – to comment on the evaluation process and suggest if new bids should be called for or if existing bidders should be asked to submit fresh bids.

This panel has, in turn, appointed a sub-committee of technical experts led by E. Sreedharan, one India’s best-known technocrats and the chief of the mass rapid transit, Delhi Metro Rail Corporation.

The sub-committee is scheduled to submit its report to the government on Tuesday, though it may take longer for its findings to be made public. Meanwhile, the Mexican firm is keeping its fingers crossed.

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