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SA Consortium wins India airport bid
Monday, February 13, 2006 | 00:00



Following public announcement by the Government of India regarding the outcome of the tender for the modernisation of India’s two main airports in Mumbai and Delhi, the GVK – SA consortium is delighted to confirm that they have been officially informed that they are winners of the Mumbai International Airport bid. The contract is to modernise, operate, develop and manage Mumbai International Airport to achieve world-class standards.

The GVK-SA Consortium comprises well-known Indian infrastructure group GVK and South African companies Airports Company South Africa Limited (“ACSA”) and The Bidvest Group Limited (“Bidvest”).  The consortium will partner the Government of India who will retain a 26% shareholding in the airport during the concession period of thirty years with an option for a further thirty years.  The consortium interest is split GVK 37%, ACSA 10% and Bidvest 27%. 

“From now onwards further engagements will be aimed at finalising the transaction and preparing for the transfer of the airport. ACSA will discharge its responsibilities with humility and the spirit of ubuntu that Africans are renowned for, a principle that is core to our philosophy in doing business. ACSA will roll out its intellectual know-how consisting of policies and procedures, information technology solutions, total quality management, environmental management, maintenance and engineering, safety, service standards, capacity planning and master plans, project management, route and traffic development and stakeholder management,” says ACSA Managing Director Ms Monhla Hlahla.

She further says that in terms of human resource development, ACSA will provide technical exchange programmes as part of its skills transfer initiatives within various functional areas. “However, I must hasten to mention that the learning experience will be a two-way process for ACSA and Mumbai International Airport employees. Through these initiatives ACSA will clearly gain invaluable experience from exposure to the Indian environment. This transaction will therefore enrich all employees and partners involved. Furthermore, it stands to create job opportunities within ACSA as seasoned professionals are posted to Mumbai on an ongoing basis.

“Another area of focus where we believe we will extract value for the Government of India is through non-aeronautical commercial activities as ACSA is particularly well positioned to realise an all-encompassing commercial transformation for Mumbai International Airport.  The remarkable growth of commercial revenue has contributed significantly to ACSA’s financial success over the years.  It has grown by 364% in the last eight years at a rate nearly three times that of the company’s aeronautical revenues.  In the financial year ending 31 March 2005 the commercial division contributed 45,5% of total Group revenues and 76,6% of ACSA’s headline net operating profit, “ Ms Hlahla added. 

Ms Hlahla says ACSA’s 10% shareholding in the concessionaire vehicle is a show of commitment to the project and our belief in the project economics of this transaction.  Our role will be that of an airport operator which is to rehabilitate, develop, operate and manage the airport on behalf of the concessionaire

For ACSA, this acquisition will significantly enhance the growth of the company over the concession period, especially with the high traffic growth rates forecast in Asia.  Mumbai is the commercial capital of India and one of the ten largest cities globally with about 18 million inhabitants.  The predicted growth of air traffic in India is enormous borne out by the aircraft orders placed by airlines as well as the increase in living standards in India.

With regard to the selection of GVK as a partner, Ms Hlahla says that after a thorough and comprehensive process GVK was selected as the South African consortium's partner for the bid.  “The choice of GVK as a partner was primarily due to their commitment to the project, their experience in Indian infrastructure projects particularly in the power sector, toll-roads and urban infrastructure, their successful partnerships in the past with credible international partners such as the IFC, their ability to raise debt finance in the Indian market, their approach of an equal partnership with the South African consortium and their shared values regarding corporate governance.”

ACSA’s Acting Chairperson Dr Franklin Sonn says the transaction for the modernisation and management of Mumbai International Airport to the GVK-SA is a turning point for ACSA as we are soaring to new heights on the international front, that is, we are fast becoming a pre-eminent airport operator of choice based on a number of requests for partnership we receive in respect of various international airport bids.

“I am certain that this is as a direct result of the efforts of all the people of ACSA, who on a daily basis, power the company forward. However, our geographic focus is very clear and we will maintain a deliberate focus on the African continent and will obviously look at opportunities within the Indian Ocean Islands to leverage the Mumbai International Airport opportunity. ACSA will continue to seek opportunities in other regions mainly within the African continent and the Indian Ocean islands,” he added.


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