Reliance to supply jet fuel to 25 airports across India

Vol 9, PW 18 (15 Dec 05) Midstream & Downstream

Reliance has begun buying land to set up storage facilities for the supply of jet fuel to 12 of 25 airports across the country.

PETROWATCH learns the Airports Authority of India (AAI) has already awarded the contract to Reliance to construct Aviation Fuel Stations at 12 airports on a Build, Operate and Transfer basis and that negotiations are underway for another 13. Reliance was sole bidder for the contract, following a surprise decision by state refiners Indian Oil, Hindustan and Bharat Petroleum to stay away a move sharply criticised by officials at the civil aviation ministry.

Citing ambiguities in certain clauses of the tender the three refiners submitted a joint response to the civil aviation ministry explaining their decision not to take part. There was a clause in the tender which said that the successful bidder should transfer the property to the airport authority after five years, BPCL tells us.

In five years we wont even manage to recover our investment. Caught by surprise, civil aviation secretary Ajay Prasad wrote to oil secretary Sushil Tripathi on 30th August complaining about the non-participation of state-owned companies.

Prasad stressed the need for healthy competition but said Reliance was the only company that showed interest. It is not proper on the part of PSU oil companies to state that they will not bid unless the policy is decided, complains Prasad.

Airports Authority of India has given the opportunity to the public sector oil companies to take part in the tender process. Yet they are not taking part by raising baseless issues of policy.

Prasad asks Tripathi to direct the three refiners to bid otherwise we shall be left with no choice but to decide the issue on a single bid basis (Reliance). Airport authorities pushed back the deadline for bids from 17th August to 24th August in the vain hope that the PSUs would change their minds and bid.

Contacted by this report, a senior oil ministry official declines to be drawn into the dispute. We dont want to get involved in this matter, he said.

If there were some handicaps in the tender, they affected everyone.