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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