IndianOil-Adani wants IndianOil contracts
Controversy surrounds a meeting between IndianOil-Adani Ventures and the IndianOil board to discuss a potential operations and maintenance (O&M) contract for pipelines and other assets.
"They have met once and discussed the proposal," says a well-placed source. "They will be meeting again next week."
Some claim the IndianOil and Adani Total joint venture, formerly known as IndianOil Tanking or IOT, is hoping to win the contract for pipeline assets, tank farms and Single Point Mooring (SPM) systems without a tender. "Former IndianOil director pipelines DS Nanaware has joined the joint venture (IndianOil-Adani)," adds our source.
"They aim to extend their operational reach significantly." Nanaware is believed to have joined IndianOil-Adani two or three months ago.
"As a former director (of a state-owned oil company), Nanaware needed approval from the oil ministry to join a private company in a board position," we hear. "When the ministry didn't give him approval, he joined in a role several levels below the board."
Under discussion is the operations and maintenance contract for a proposed pipeline from Paradip to the Numaligarh refinery and the Paradip tank farm. On the west coast, the JV is said to be keen to win an O&M contract for the proposed pipeline from Mundra to Panipat to transport crude oil.
"O&M contracts are usually awarded through tenders," adds our source. "If they win the contract through a tender, there is nothing wrong with it; but if they win it on a nomination basis, that is not right."
Our source expresses concern about IndianOil potentially giving the JV operational control over some of its assets. "These locations are crucial crude feeding points for IndianOil refineries at Panipat, Mathura, Vadodara, Paradip and Haldia," he stresses.
He complains that IndianOil already pays high fees to Adani for using the tanker unloading facilities at Mundra Port, used to supply oil to the Panipat and Mathura refineries. In 2002, IndianOil signed a deal with Adani for Rs250cr ($30m) to build an SPM facility at Mundra to import crude.
Our source claims that "if this keeps happening, it will be a huge financial loss to IndianOil," which he claims will also "lose its expertise in handling terminal operations."