India's biggest engineering and construction company, Larsen & Toubro Ltd, will be a part of two corporate groups that plan to bid for the privatisation of two of the country's biggest airports, an official said on Saturday.
The Indian government is privatising the operations of the New Delhi and Mumbai airports in a bid to upgrade the shabby airfields to world standards.
It plans to set up two joint venture companies, in which private companies can hold up to 74 percent stake, that will hold the lease to operate the airports. Preliminary bids for the 74 stake close on July 20.
Anumolu Ramakrishna, L&T's deputy managing director, told Reuters on the phone from Mumbai the company had signed an agreement to bid for the Delhi airport with Singapore's Changi Airport and local firm Bharti Enterprises.
It has signed a similar agreement with Piramal Enterprises Ltd and Germany's biggest builder, Hochtief AG that will bid for the Bombay airport.
"The percentage of our interest has not been finalised yet because the bids are still in the expression of interest stage," Ramakrishna said, adding L&T would provide engineering design, procurement and construction services for the projects.
Larsen & Toubro already holds a 17 percent stake in India's first private sector-led international airport being built in the technology city of Bangalore that will be ready by July 2006.
India's new government has said it will continue the privatisation of the two airports begun by the previous government, but issued new guidelines for their sale that ensure majority control for local firms in the two operating companies.
It has also cut the foreign equity cap in the two companies to 49 percent from 74 percent.
Ramakrishna said the cut in the foreign equity cap was unlikely to dent investor interest as foreign partners were unlikely to insist on majority equity.
Indian trade unions and Leftist leaders have protested against the privatisation of the airports, saying it violates the new government's promise not to privatise profit-making firms.
The New Delhi and Bombay airports together account for 70 percent of the profits of Airports Authority of India, the umbrella body that operates India's 125 airports.
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