Sfm Assignment

8/2/2019 Sfm Assignment

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Case Questions - SFM

Privatization of Delhi and Mumbai Airports

1. Did Government of India (GoI) conduct the airport privatization

process in a reliable and transparent manner?

Ans. For me government of india conduct the airport privatization process in

a fair,reliable and transparent manner and did not receive any criticism from

stakeholders:

The bidding process for the selection of concessionaires for the the Delhi

and Mumbai airports was a controversial one. the bid process was steadily

moving towards the award of the Delhi airport in favour of a particular

bidder, thanks to the flawed evaluation by the international consultants of the

Airport Authority of India.

one of the constituents of the inter-ministerial forum laid bare the infirmities of the

evaluation scores. This led to much debate within the government and extensive

coverage by the media. Once in the public domain, the entire process became open

and transparent. It led to a fair outcome that not only withstood the scrutiny of the

Supreme Court but was also free of any criticism in the media or Parliament.

Main points for me in this case

Government allowed private sector bidding in Sep-03 and it was only by

Sep-05 that we could ask the private sector to bid. Following groups bid:

For both airports:

Essel-TAV ,GMR-Fraport ,DS Construction-Munich ,Sterlite-Macquarie-

ADP Reliance-ASA

For the Mumbai Airport only

GVK-ACSA


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By Nov-05, the finalisation was almost done with GMR-Fraport and

Reliance-ASA as the only qualifying group. However a member from

Planning Commission who was part of the bidding process criticized this

bidding process. The member showed that the award was not done fairly

and rankings and ratings of bidders suffered from conflict of interest andwere imperfectly done.

The bidding process was done again and a new expert team which

reevaluated the bids which found only GMR-Fraport qualifying for both the

airports. Hence GMR-Fraport was given the option of choosing one. It

chose Delhi. Mumbai airport was awarded to GVK-ACSA as it offered the

highest financial bid for the Mumbai airport.

2. If you are acting as a consultant to GoI, what would be your suggestions

to GoI for further privatization process?

ANS:- SUGGESTIONS TO GOVT. OF INDIA

1. GOVT. SHOULD FOCUS ONE OF THE MAJOR ASPECT THAT

IS :-Transparency is important and desired: This case also demonstrates the

role of transparency and open debate. Initially, the deal was as alleged as an

open and shut award in favour of one of the bidders, and it was about to be

concluded on those lines. In an open democracy like India, where virtually

all big deals involving the private sector are routinely criticised and

questioned, this would seem to be a singular achievement, made possible by

a fair and transparent approach.

2. Hiring world class international counsultant is no guarantee or a fair and

professional outcome. It was the manner in which criteria and processes

were designed by the consultants for evaluation. So govt should focus on the

design which was proposed by the consultants.

3. There should be proper bid structure should be followed which should

include following

a) Parameters


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b) Weightages and scoring

c) Obligations of biddrs during the bid process

d) Transparency

e) There should be some implications for those who had not bid

4 . Norms during the bidding process need to be specified and compiled with

adherences to deadlines ,and deciding modifications in the evaluation by EC.

Taming the elephant - turnaround of Mercedes-Benz India Limited

1. What are the key drivers which have forced MBIL to consider

restructuring?

Ans. Key drivers which forced MBIL to consider restructuring are as

follows

Traditionally disposable income was perceived as the one critical factor that

drove passanger car demand. However, household income is no longer the

single most important factor in determining the demand for vehicle othercritical factors are the mobility needs of people and the availability of cheap

finance.

One of the key driver is competition from substitutes.

Another one is threat of new entrants

Next is Rivalary between established compitors

= Bargaining power of buyers and last

Bargaining power of suppliers.

2. If you are Juergen Ziegler, CEO, MBIL, what actions you would take to

restructure the company and take it out of restructuring?


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Submitted by:

JITENDRA SINGH

MBA 4TH SEM

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Sfm Assignment