The GMR Group has held exploratory talks with Airports Authority of India (AAI) for a partnership to jointly develop airport projects overseas, two people in the know of the development confirmed.
The move comes just months after GMR?s contract for the Male airport was cancelled after a regime change in Maldives. GMR is now in a litigation to get nearly $800 million as compensation.
?The talks are at a very nascent stage,? said one of the people. ?AAI has not yet decided anything and will look at the merit of any project before committing to a partnership.?
A positive outcome to the talks will not, however, change the ownership pattern of the Sahiba Gokcen International Airport in Istanbul. Apart from Turkey, GMR also operates airports in Delhi and Hyderabad.
?We have no such plans as of now,? said a GMR spokesperson, when asked to comment on the development. Sources said GMR is seeking a partnership with AAI as it would help mitigate some of the political risks while going in for an overseas project. It could also get indirect support from the Indian government, which could use its diplomatic clout to help the partners bag international projects or in resolution of disputes.
GMR was forced to relinquish control of the Male international airport after a change in the island country’s government that didn’t agree to GMR?s policy of user development fee. The Hyderabad-based airport developer had to leave the airport after a month’s litigation and is now fighting for a compensation.
?Having a state-owned company as a partner could reduce the risk of such situations as no country would like to offend another nation,? said a consultant with a global audit and consultancy firm on condition of anonymity. ?Also it becomes a little easier to get financing by showing a government-owned company as a partner.?
AAI is an equity partner with GMR in the Indira Gandhi International Airport in Delhi. AAI holds 26% in Delhi International Airport that manages and operates the airport. AAI is India’s largest airports operator and generates profit by managing over 100 airports. During fiscal 2011-12, AAI’s revenues stood at R5,879 crore while its profit before tax was R1,364 crore.