IndianOil may fuel jets at Delhi airport
New Delhi   23-Mar-2009
<b>Co Reported to have made lowest bid in tender floated by DIAL for building & operating fuel facility</b> State-owned oil marketing company IndianOil may bag the contract for providing aircraft fuelling facility at Delhi Airport, the country’s second busiest airport. IndianOil is reported to have made the lowest bid in a tender floated by airport operator Delhi International Airport (DIAL) for building and operating the facility. According to a person familiar with the development, Reliance and IndianOil were shortlisted in the first few rounds. The existing fuel service provider Bharat Petroleum Corporation (BPCL) chose to stay away from the bidding process. But, the company will continue to service the current fuelling facility. As a result, IndianOil, once it wins the tender, and BPCL will simultaneously provide fuelling services at the airport. The fuelling facility, which is likely to be built by IndianOil, can be used by other oil marketing companies. They will pay usage charges to IndianOil. At present, aircraft at Delhi airport consume fuel worth Rs 5,000 crore in a year. Once the airport is expanded, the demand will increase. Along with a new terminal building and expanded physical infrastructure, Delhi airport’s new fuelling facility would be able to store up to 60,000-kilolitre fuel. Though there is clearly need for an upgraded fuelling facility, the decision has proved to be controversial. BPCL has opposed the plan because it would mean an end to its contract for providing fuel beyond 2013. Moreover, it would mean increased competition for business from airlines using Delhi airport. BPCL’s objections got support from the petroleum ministry that wants the civil aviation ministry to intervene and cancel the tender. The Cabinet secretariat will meet all stakeholders, including DIAL, next week to resolve the issue. Though BPCL has objections, the new facility would benefit airlines as increased competition among fuel companies could lower rates and offer better terms of business. “Besides lower price, oil companies would also give longer credit to airlines in order to retain them. The new fuel facility provider would recover its investment by levying a fee on other oil companies that use its facility. Airport operator DIAL would also benefit because cheaper fuel could make the airport more attractive for airlines and thus increase traffic,” said a DIAL official, who did not wish to be identified. “We would give the contract to any company that charges other oil companies the least. The other oil companies will recover this charge from their own customers (airlines),” he added. DIAL, a consortium led by Bengaluru-based GMR group, is modernising the 5,000-acres IGI airport with an investment of Rs 8,900 crore in the first phase.