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Regarding the privatisation of Airports, the OIL PSUs would like to once again lay the salient points for kind information and consideration of the Oil Ministry.

1. Oil PSUs have noted the Government's decision to privatize six major airports viz. Chennai, Kolkata, Guwahati, Ahmadabad, Jaipur and Lucknow. It is understood that Airports Authority of India (AAI) has already started the process of selection of parties for Operation, Management and Transfer of these airports through PPP mode. Major criterion for selection of bidders is the highest premium offered to AAI. Concession agreements are expected to be signed by Mar'14
2. Oil PSUs would like to make the following submissions to the Ministry :
   1. The Oil PSUs have been present at these six airports for almost five decades and have played significant role in operation and development of these airports under AAI. As and when the traffic and consequent fuel requirements at these airports increased, the fuel facilities were accordingly augmented by the Oil PSUs, ensuring fuel security at these airports at all times
   2. In the past, subsequent to privatization of Delhi & Mumbai Airports, the new airport operators had planned to call for tender for fuel farm facilities. However, due to intervention and support from MoPNG, Oil PSUs' interests were protected
   3. Going by the past experience, there is an imminent threat of new Airport Operators making major changes to the existing fuelling arrangements and fuel facilities painstakingly built by Oil PSUs over the decades at these six airports. It is apprehended that the private airport operators may insist on taking over of fuel facilities of Oil PSUs, or float tenders for building/ operating new facilities.
      Any such steps would be detrimental to commercial interests of Oil PSUs. Moreover, this would also lead to Government assets becoming redundant. It may kindly be noted that the existing infrastructure has useful life left for many years of operations, and is capable of taking care of present as well as future ATF requirements
   4. Oil PSUs are of the strong opinion that the proposed privatization of these six airports by AAI should not lead 'to any change in existing fueling arrangements. As may kindly be appreciated, this would be the least cost option and any other alternative will involve huge investments, consequently resulting in significant increase in fuel cost at these airports, which is neither in the interests of airports, airlines or the oil companies.
      If need arises, PSU fuel infrastructure can be integrated and operated on 'Open Access' for all eligible ATF suppliers at these airports, on mutually agreed commercial terms, which shall be approved by AERA (Airports Economic Regulatory Authority of India)

In view of the above, it is requested that as in the past Ministry may kindly use its good offices with MoCA, for protecting and safeguarding the interests of Oil PSUs at these airports.

Source: SNP Infra Research