Date:03/03/2006 URL: http://www.thehindubusinessline.com/2006/03/03/stories/2006030303881100.htm

Back IOC group wins Bangalore airport bid

Our Bureau

Setting up aviation fuel supply infrastructure project under open access model

Mumbai , March 2

A consortium led by Indian Oil Corporation has pipped ONGC-Total, BPCL-Shell, HPCL-Chevron and Reliance-Bechtel to bag the contract for setting up the aviation fuel supply infrastructure project at the new international airport coming up in Bangalore.

The deal was formalised here on Thursday with Bangalore International Airport Ltd (BIAL) that selected the IndianOil-led consortium as partner for the new airport's aviation fuel facility. The other partners in the winning consortium are Indian Oiltanking (a 50:50 joint venture between IndianOil and the Hamburg-based Marquard & Bahls) and Skytanking Holding, Germany, a company that operates aviation fuel facilities worldwide, especially in Europe and the US.

Consortium's task

The consortium will be responsible for the design, construction, financing and operation of the facility. It will invest about Rs 90 crore in the project and the duration of the contract is 20 years. "IndianOil is proud to lead a consortium of world class companies for setting up a pioneering aviation fuel supply infrastructure project at the new Bangalore International Airport", said Dr N.G. Kannan, Director (Marketing), IOC.

"With 95 aviation fuel stations, 65 per cent market share and intellectual knowledge sharing with world leaders like Air BP, we are proud to be of service to BIAL in its journey of setting world class benchmarks in India.

"Fuel costs are a major portion of the costs of operating an airline and such a model as the one planned in BIAL will help reduce the operating costs of aviation fuel handling and refuelling", he said.

The consortium, which has been ranked number one after an extensive technical and financial evaluation process, consists of Indian Oil Corporation , Skytanking Holding and Indian Oiltanking.

The fuel facility in Bangalore will be the first in India to operate under an open access model.

"Fuel prices have become one of the major cost factors of an airline operation. Airports have to offer airlines competitive fuel pricestructures in order to be an attractive destination for them. The implementation of a truly open access model is therefore of strategic importance to BIAL", said Mr Albert Brunner, Chief Executive Officer, BIAL.

BIAL's stake structure

The first Greenfield private sector-owned and operated airport in India, BIAL has private promoters holding 74 per cent stake while the State holds the remaining 26 per cent.

Among the private promoters, Siemens Projects Ventures holds 40 per cent while both L&T and Unique Zurich Airport hold 17 per cent each. The State equity is divided equally between the Karnataka State Investment & Industrial Development Corporation and the Airports Authority of India.

Bangalore International Airport, that began construction in July 2005, is hoping to commission the airport by April 2008. Towards this, it has begun the process of identifying its key commercial partners for various airport operations such as aviation fuelling, ground handling, operation of the cargo terminal, flight catering and aircraft maintenance.