Mumbai: The General Electric Co.has widened its search for potential partners to go after the business of Indian private airports.
People familiar with the situation said that the conglomerate has initiated conversations with Larsen & Toubro Ltd, India’s largest engineering construction company, Gammon India Ltd and GVK group.
The talks come even as GE continues to be in discussions with Maharashtra Industrial Development Corp. and Maharashtra Airport Development Co. over similar projects.
While all three companies are engaging in conversations with GE for potentially developing various airports that are being thrown open to the private sector for development in the country, one major infrastructure builder, the GMR group, which is developing the Hyderabad and New Delhi airports, isn’t too keen.
“GE’s experience in this area is yet to be proven,” said Madhu Terdal, CFO corporate strategic finance, of GMR. “We already have the necessary expertise from our partners (Fraport and Malaysian airport), our international talent pool and our own experience.”
Norman Liu, an executive vice-president for commercial operations at GE Commercial Aviation Services, said: “We would prefer not to comment on commercial discussions.”
Airport modernization is likely to require investments of about $12 billion (Rs49,200 crore) in the next 15 years, according to a study by industry lobby Ficci and the Centre for Asia Pacific Aviation, including 35 non-metro airports that will be modernized at a cost of Rs7,000-8,000 crore.
L&T through its engineering, construction and contracts division (ECCs accounts for about 73% of the conglomerate’s revenues) is India’s largest construction organization. It is involved in construction of everything from airport buildings to airport complexes.
K.V. Rangaswamy, the division head in charge of L&T’s ECC strategic business unit, confirmed that GE has been in touch, adding, “So far no serious proposal has been received by us though.”
L&T is also attractive to GE as a partner because the American multinational is also interested in entering the roads and ports sector, another area where L&T has key strengths and is also willing to take stakes in airport projects.
GE is also looking for development of ports and container terminals, rail projects, mass rapid transport systems and highway toll roads in the country as well, in partnership with other developers.
L&T has already won several airports-related contracts, including a project valued at Rs5,400 crore from the GMR-led Delhi International Airport Pvt. Ltd for the expansion and modernization of the Delhi International Airport. The company has also won an order valued at Rs263 crore for the construction of the passenger terminal building at the proposed Hyderabad International Airport. This order is in addition to the Rs495 crore order received by L&T from Hyderabad International Airport Ltd (HIAL) for the construction of the runway, taxiway and aprons. L&T has a 17% stake in the new Bangalore Airport at Devanahalli being built by an consortium of Unique Zurich Airport with Siemens Project Ventures GmbH.
Meanwhile, GVK group is attractive to GE because of its ability to bid, win and manage airports such as the Chhatrapati Shivaji International Airport at Mumbai. A GVK spokesperson would only say “whatever opportunities come up in the airports space in India, we will bid for them.”
Gammon has been associated with construction of Sharjah Airport in UAE. It has floated a subsidiary Gammon Infrastructure Projects Ltd (GIPL) that has identified airports for project development and infrastructure investment.
An email sent to Gammon India did not elicit any response as the company’s official spokesperson couldn’t immediately be reached forcomment.