The Hindu Business Line : Oil cos request AAI to defer awarding AFS licence

IOC, BPCL and HPCL have jointly requested the Airports Authority of India (AAI) to put on hold the ongoing exercise of awarding licences for putting up aviation fuel stations (AFS) on a build, operate and transfer (BOT) basis in 25 civil airports. The PSUs have also sought intervention of the Union Ministry of Petroleum in resolving the issue of awarding of tender, which was invited in June 2005.

The oil marketing companies, which were the sole providers of AFS facilities at all Indian airports for the last three decades, had objected to certain tender conditions and stepped out of the race, paving the way for Reliance to stay as the only bidder. The latter was awarded licences in 12 major airports in the country in December last and is also the only contender for the rest. Reliance did not respond to queries from Business Line on the issue.

According to industry sources, the oil PSUs, which wanted to participate in the tender, had objected to Clause 20 and 21 of the tender process. The first underlines that AAI reserves the right to continue or discontinue with the existing AFSs (set up by IOC, BPCL and HPCL). AAI also reserves the right to consider (for the AFS facilities) any additional party other than that for this tender.

"Tender conditions were unclear about the fate of the existing AFSs; accordingly we sought clarification from AAI on the issue," sources told Business Line.

According to them, AAI clarified that though it was not mandatory for the OMCs to participate in the tender, since AAI held the right for renewal of lease of the existing AFSs, they (OMCs) should bid in their own interest.

"We are not against competition. However, we think it is justified on our part to know the fate of our existing business. Moreover, if licences are granted on single-bid basis, it would not help competition in any way," sources said.

When contacted, an AAI spokesperson said that the tendering process aimed at liberalising this sector and all players were provided a level-playing field.

"All steps were taken to ensure transparency in the tendering process. There were a number of meetings with those participating and some suggestions put forward were incorporated," the spokesman said.

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