News: Tata group set to enter airport modernisation biz

(BL 17/02/2007) New Delhi - In keeping up with its business expansion mode, the Tata group is set to enter the business of airport modernisation. Partnering the Tatas could be the Singapore-based Changi Airport International, which has already made bids in the past to get involved in the development of airport infrastructure in the country.

Sources told Business Line that the Tata group is expected to take a majority stake in the venture and an official announcement is expected as early as next week.

The Tata group's proposed foray into the aviation sector would come after a considerable time since it made an abortive bid more than a decade ago to enter the aviation business in India in partnership with Singapore Airlines. Since then, the group has steered clear of this sector, except for picking up a small equity stake in SpiceJet recently. The Tatas were not involved with the modernisation of Delhi and Mumbai airports that saw bids from leading Indian corporate groups such as GMR, GVK, Zee, Reliance Anil Ambani Group and DS Constructions.

Govt move

While Delhi and Mumbai airports modernisation would involve over Rs 10,000 crore, the Government is now keen to push forward the modernisation of not only the metro airports of Chennai and Kolkata but also plans to rope in the private sector for the city-side development of 35 non-metro airports. Besides, plans are also being discussed about having another new airport in Mumbai for which the International Civil Aviation Organisation has cleared the feasibility report.

Changi Airport International (CAI) is a wholly owned subsidiary of the Civil Aviation Authority of Singapore, which owns and operates Changi airport.

CAI has actively been searching for a suitable Indian partner for some time now.

Joint ventures

Late last year, senior CAI officials had indicated that a number of leading Indian business houses from diverse fields, including those in construction and real estate development, were interested in a possible joint venture to pursue the proposed modernisation and development of Kolkata and Chennai airports.

In addition, CAI is also in talks for development of greenfield airports, including some within the proposed Special Economic Zones.

CAI provides consultancy and management services to many airport projects in countries all over the world, including China, Fiji, India (Bangalore), the Maldives, Pakistan, the Philippines, Seychelles and Russia. The scope of services covers major areas such as airport master planning, review of terminal operations, air traffic forecasts, feasibility studies as well as providing customised aviation training programme.

The company has also been involved with manpower training of staff at the Mumbai airport after the running of the airport was transferred to a consortium led by the GVK group.

In 2005, Changi had partnered with Bharti to bid for the modernisation of Delhi and Mumbai airports.